Openness of Innovation in Services and Software - Essays on Service Innovations, Open Source, and Hybrid Licensing Models

Abstract

Open Innovation—and Open Source as its particular manifestation in the software industry—have recently been touted as cornerstones of competitiveness for firms in the new service economy and of value added by public institutions involved in the gathering, processing and publishing of information. Although the basic concepts are by no means new, a considerable surge in research literature has occurred over the past decade around the keywords of open source, open innovation, value co-creation and both innovation in general and service innovation in particular. Putting breakthrough inventions aside, I consider what exactly open innovation means: What qualifies as an innovation and how is it different from the plain old product or service development? Is open inherently better than closed, and what exactly is the difference between the two? What middle ground is there, if any? Services growing in importance, is open innovation in (software) services different from (open) innovation in software products? Besides, is there any real difference between software services and software products? Particularly, what is the role of customers in that extended open community around the firm? What is the value that they see vs. the value that the firm sees? In the four research publications in Part II of this dissertation, I am addressing these questions in more detail in various contexts: both from a purely software development and software business perspective and from a more general service development and innovation perspective. The four publications have more specific research questions and detailed implications, in addition to contributing to the general themes outlined above. They elaborate on the following topics: Different perspectives to value co-creation in services and the customer/supplier value construct; Roles of customers in service innovation activities in standardised services with transactional intent; The effect of adoption of open-source tools within a commercial for-profit organisation on the organisational structure itself; and Hybrid open-closed software licensing model as a platform for reverting from commoditised product business to higher-value customer relationships. Beyond the theoretical and practical contributions of the publications in Part II, Part I of this dissertation offers a robust definition of innovation in general as well as a more defendable view of the nature of services vs. goods. In addition it clarifies what the term product means in relation to both services and goods as well as in the software industry—a topic that often causes confusion among academics and practitioners.