The uprising and flourish of the Open-Source Movement is an importantphenomenon in the software industry since the 1990s. From the economicspoint of view, the Open-Source Software (OSS) is a public good which couldrealize full value transfer. Its emergence has brought a great impact upon thetraditional software industry, and offers a good opportunity for developingcountries to develop their downstream software industry.The present research of the OSS focuses mainly on three domains:incentive mechanism, policy intervention and market competition. Based onthe existing literature, this paper establishes two theoretic models to describethe market competition between the OSS and the Proprietary Software (PS).Models 1 analyzes the market structure changes when the OSS comes into amarket monopolized by the PS. Models 2 extends Model 1 by dividing thesuppliers into upstream firms and downstream firms. According to theconclusion of the analysis, it makes comments and suggestions for theChinese government to develop China's software industry. |