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Harvard Business School Models Linux vs. Windows

Harvard Business School’s Working Knowledge newsletter publishes “Microsoft vs. Open Source: Who Will Win?”

From the abstract:
“Strictly speaking, within our model the only way in which Microsoft can get rid of Linux is by setting the price at zero. But, even if Microsoft did that, the company would still be selling MS Office for a positive price. Thus, we conjecture that even in this case, there would be people developing and using Linux.”

On the other hand, “In addition to cost-related reasons, governments back Linux because having access to the source code allows them to verify that sensitive data is treated securely. Binary code makes it hard to figure out who has access to information flowing in a network. Companies such as IBM, in contrast, back Linux because they see in OSS one way to diminish Microsoft’s dominance. We find that the presence of strategic buyers together with Linux’s sufficiently strong demand-side learning results in Windows being driven out of the market.”

Minor changes to the model can swing the results widely. However, Linux survives in all of the possible outcomes.

Unfortunately, while the title of the article mentions “open source,” it only discusses the Linux OS, and doesn’t analyze OpenOffice’s contribution!

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