The cathedral, the bazaar and the condominium: an essay on a business model of free open source software

Abstract

Free Open Source Software is described as viable software for commercialization. Considering the revenues and market shares of the dominant suppliers, this software emerges as an alternative business model for segments in which open source software presents competitive advantages over the traditional model. Potentials, limitations and technological, economic and sociological aspects of organizational structures of companies that produce products and services related to Free Open Source Software are described. From the transaction cost and information economy perspectives, a hybrid model to develop Free Open Source Software is presented which is structured according to the concept of a condominium. That is, a central administration coordinates collective action, while the community works and monitors the action of the central direction. This model may be considered as an alternative competitive strategy to peer production (Bazaar) and centralized (Cathedral) models.