Nowadays, free software is a valid and viable alternative to proprietary software. Features such as the modularity of its development and installation, a standard-based operation and the constant evolution of applications form an adequate basis for the competitiveness of free software.
Nonetheless, this competitiveness will not be sufficient for the free software business if these and other features are not properly channelled. In other words, to create a project that will be stable and reliable over time, we must define a business strategy to unite and coordinate the advantages while managing and controlling the disadvantages.
In this first section, we will look briefly at the main features that make free software a competitive alternative to proprietary software.
Recommended website
M. Boyer; J. Robert(2006). The economics of Free and Open Source Software: Contributions to a Government Policy on Open Source Software(Ch. 3, "Advantages and disadvantages of FOSS").
Cost
In general, applications based on free software are freely available at no charge from the Internet. This distribution philosophy is the antipode of the proprietary model, where payment is usually required for limited use of the application in binary format.
Consequently, cost is a significant competitive advantage for the adoption of free software over proprietary alternatives, given that it can substantially reduce the required investment for a technological implementation (whether created from scratch or for a major system overhaul).
The reduction in costs can also be significant in the evolution or specialisation of a particular application because while free software guarantees the possibility of aligning the application with specific interests through free access to the source code, the proprietary equivalent may require a completely new development.
Development, flexibility and modularity
While the development of a technological solution based on free software may sometimes differ only slightly from the proprietary equivalent, methodologies based on collaboration and co-evolution between company and user community have the advantage of cooperations of scale.
These features offer a number of possibilities, ranging from the exploitation of economies of scale and the creation of segmented markets to the flexibility and modularity that enhance both the interoperability and integration between applications and their extension and evolution. In short, these features encourage the generation of specific business opportunities.
Technology risk
Generally speaking, the risks associated with technology adoption affect free and proprietary software equally, at least from a strictly technological point of view.
As a result, in the case of specific applications or solutions, the risk bears more relation to the specific capabilities and competencies of the latter than to the technology or methodology used for their development.
Security, reliability and life cycle
Over time, the evolution of software development methodologies has led to greater and better control of the quality of the software produced, particularly in areas such as adaptation and bug-fixing.
In this case, the opening up of the process of free software development and the collaboration of the user community in the latter affords substantial differentiation from the proprietary model. In other words, it will be difficult for a company that produces proprietary software to match the human and time resources used in free software projects.
This unique feature of free software adds to the competitiveness and reliability of solutions, both for companies and for their customers.
Support and documentation
Occasionally, applications based on free software can lack the packaging we are usually offered by their equivalent proprietary software applications. From a sales point of view, this situation is a source of business opportunities on several levels, with the additional benefits that specialisation and customer proximity can bring.
Change management
Free software encourages the restructuring of the values integrated in the traditional market: it provides independence, freedom, lower costs and investment efficiency, many of which have been mitigated in the traditional software business.
Restructuring of values
Free software provides independence, freedom, lower costs and efficiency of investments, many of which have been mitigated in the traditional software business.
It also allows companies to adjust the cost structure and establish coopetition strategies with related or complementary providers. This situation is more advantageous, competitive and effective – and less risky – for its participants than their proprietary consortium equivalents.