The paper discusses three key economic problems raised by the emergence and diffusion of Open source software: motivation, coordination, and diffusion under a dominant standard. First, the movement took off through the activity of a software development community that deliberately did not follow profit motivations. Second, a hierarchical coordination emerged without the support of an organization with proprietary rights. Third, Linux and other open source systems diffused in an environment dominated by established proprietary standards, which benefited from significant increasing returns. The paper shows that recent developments in the theory of critical mass in the diffusion of technologies with network externality may help to explain these phenomena.

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Abstract. The role of firms in commercial Open Source projects (e.g., former MySQL, EnterpriseDB, SugarCRM) is a consolidated and generally accepted fact. On other hand, community Open Source projects, which are built upon communities and not directly associated with firms, are commonly perceived to be based mainly on the work of volunteers. Up to now, firms' role in these projects has been poorly investigated. We conducted a survey on 1,302 SourceForge.net projects to inquire about the level and the typology of involvement of firms. We propose three different models for firm participation and provide empirical evidence on their diffusion in SourceForge.net.

Innovation processes taking place in the software sector are already widely debated. The widespread success of Free/Open Source Software (FOSS) raises new research issues, dealing with whether and how the free circulation of ideas championed by the movement and its collective management of intellectual property rights fosters innovation. The aim of this paper is to contribute to the literature by addressing the following research questions: are programs based on FOSS solutions more innovative than proprietary ones, and, if so, which innovation dimensions are typical of the FOSS production mode? Based on a sample of 134 software solutions produced by Italian Small and Medium Enterprises and using a methodology frequently applied in technology management to evaluate innovativeness of products and services, this exploratory study provides initial insights into what happens when alternative metrics are used to observe complex innovation processes in the software market.