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2021 | OriginalPaper | Chapter

2. Background: OSS Development and Acquisitions

Author : Michael Vetter

Published in: Acquisitions and Open Source Software Development

Publisher: Springer Fachmedien Wiesbaden

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Abstract

This thesis combines two important research streams—namely OSS and acquisitions research—that have not been connected previously. Therefore, the basic principles and foundations of both research streams are outlined in this chapter. It will first cover the relevant basic principles and theoretical foundations of OSS development and then explain relevant basic principles and theoretical foundations of acquisitions.

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previous chapter Introduction

next chapter Qualitative Study: How Does the Involvement of Firms in OSS Matter in the Pre-acquisition Phase?

This history is highly abbreviated and I do not offer a complete explanation of the origins of OSS in this thesis. For more a detailed history, see for example DiBona, Ockman, and Stone (1999), or Raymond (2001).

According to O’Mahony (2003) IP rights grants still can be useful to protect the inventors from liability even if they freely reveal their inventions. They can furthermore prevent expropriation of the innovator’s innovations by others.

Developers write source code using languages such as C, Python, and Java. If software is available only in binary form—i.e., a sequence of 0 s and 1 s—as opposed to the source code form, it is difficult for developers to interpret or modify the program (Lerner and Tirole, 2002).

GNU is a recursive acronym for “GNU’s not UNIX!” (see https://en.wikipedia.org/wiki/GNU; last accessed 25.01.2021).

See https://www.gnu.org/bulletins/bull5.html for the GNU Bulletin in which the copyleft license was first introduced (last accessed 24.01.2021).

See https://www.gnu.org/licenses/old-licenses/gpl-1.0 for the original GPL 1.0 license text (last accessed 24.01.2021).

https://opensource.org/osd (last accessed 18.12.2020).

https://venturebeat.com/2018/11/08/github-passes-100-million-repositories (last accessed 12.06.2020).

The terms and descriptions for the intrinsic and extrinsic rewards utilized in this section are heavily influenced by Sojer (2010).

https://firstmonday.org/ojs/index.php/fm/article/view/583/504 (last accessed 12.12.2020).

See https://github.com/sindresorhus and https://twitter.com/sindresorhus (last accessed 21.12.2020); See https://gitstar-ranking.com/ for a list of most followed users, companies, and repositories (last accessed 06.01.2021)

This categorization is heavily influenced by Alexy (2009).

More complex OSS projects can be split up across several repositories, each containing modules of the overall OSS project. However, this is very rare.

The term ‘fork’ is traditionally negatively associated with OSS projects, as it implies that a developer has ‘hijacked’ a project and intends to take it in a direction that it will make it incompatible with the original OSS project (Sims and Woodard, 2020; Viseur, 2012). In GitHub, ‘forking’ has no negative connotation; it is simply a process enabling GitHub users to decouple their own work on a project from the original version (Sims and Woodard, 2020).

One should note that the acquirer cannot alone decide on acquisition timing—the prospective seller most often has a say in this decision as well. For example, if the potential seller is more optimistic about its firm’s future value, it will prefer to delay the acquisition until uncertainty about its value is reduced rather than accepting a lower price (Allain, Henry, and Kyle, 2016).

Patents are probably the most used measure for post-acquisition innovation output in technology-focused acquisitions. Yet, they have strengths and weaknesses (Bauer, Matzler, and Wolf, 2016). They are directly linked to inventiveness of a firm (Ahuja and Katila, 2001) and provide a measure for technical knowledge (Prabhu, Chandy, and Ellis, 2005). Yet, patents are only capturing codified knowledge, some inventions are not patentable, and value of patents is difficult to assess in terms of a cash price (Bauer et al., 2016). Furthermore, the measure most often does not account for a firm’s propensity to patent, i.e., the measure does not capture firms not filing patent applications for strategic reasons.

Title: Background: OSS Development and Acquisitions
Author: Michael Vetter
Publisher: Springer Fachmedien Wiesbaden
Book: Acquisitions and Open Source Software Development
Print ISBN: 978-3-658-35083-3

Electronic ISBN: 978-3-658-35084-0

Copyright Year: 2021
DOI: https://doi.org/10.1007/978-3-658-35084-0_2

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