Proprietary vs. Open Standards in the Network Era: An Examination of the Linux Phenomenon

For networked I.T. industries, standards adoption is a key prerequisite for attracting complementary assets. Producer firms that hope to profit from their standards success must trade off control of the standard against the imperative for adoption. Moschella outlines three eras of modern computing: systems, personal computers and network, each with its own form of standards competition. During the systems era of computing, mainframe producers maximized their control by offering vertically integrated standards architectures. In the PC era, IBM unintentionally surrendered control to two key suppliers in its haste to launch the IBM PC and maximize its adoption. Microsoft and Intel in turn sought pervasive adoption of their technologies by appropriating only a single layer of the standards architecture and publishing a subset of the interfaces to other layers. In reaction to these proprietary strategies, the open source movement developed software that relinquishes control in favor of adoption. Such free software has played an important role in Internet infrastructure, and its adherents argue that it will supplant such proprietary standards in the network era. This study examines the rise of the Linux operating system, with particular focus on its role as a PC server operating system in competition with the established Microsoft Windows OS. While Linux has its origins in the 1984 GNU Project, and was widely available beginning in 1993, we focus on the adoption motivations of organizational buyers and suppliers of complementary assets during the period 1995-1999.