Modeling the dynamics of software competition to find appropriate openness and pricing strategy

dc.contributor.authorRatnarajah, Thanujanen
dc.contributor.committeechairRahmandad, Hazhiren
dc.contributor.committeememberTriantis, Konstantinos P.en
dc.contributor.committeememberKoelling, C. Patricken
dc.contributor.departmentIndustrial and Systems Engineeringen
dc.description.abstractSoftware firms can use open source development model combined with proprietary development model to increase their profitability. Open source development models can help software firms create products with better technical features at a lower price. Since open source development is a community based development method the popularity of the software among customers will also increase. Using open source development method with proprietary method will also require firms to sell the product at a lower price. This creates a challenge for the firms to find the optimal price and level of openness to maximize their profit. Using the systems dynamics methodology, development, employment and customer choice for a typical software firm was captured in a simulation model to understand the dynamics of the software firm in a competitive market and to find the optimal level of openness and price. The model was built based on previous research literature, various software models and from the author's understanding of the software industry. Our analysis suggests that in a fast evolving market where customers spend less time researching and shopping for a software product (Antivirus market VS Operating Systems market), companies should maintain lower level of openness and higher proprietary type development to increase the Net Present Value of the organization. The software firm could benefit from a higher level of openness in a market where the customers base their purchasing decision on the popularity and compatibility of the software and strong network effects are present (e.g. Business intelligence software).en
dc.description.degreeMaster of Scienceen
dc.publisherVirginia Techen
dc.rightsIn Copyrighten
dc.subjectDynamic pricingen
dc.subjectConstant pricingen
dc.subjectSystems dynamicsen
dc.subjectProprietary softwareen
dc.subjectOpen sourceen
dc.titleModeling the dynamics of software competition to find appropriate openness and pricing strategyen
dc.typeThesisen and Systems Engineeringen Polytechnic Institute and State Universityen of Scienceen


Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
676.22 KB
Adobe Portable Document Format