Exploring the Role of Value Networks for Software Innovation

This paper describes a research-in-progress that aims to explore the applicability and implications of open innovation practices in two firms – one that employs agile development methods and another that utilizes open source software. The open innovation paradigm has a lot in common with open source and agile development methodologies. A particular strength of agile approaches is that they move away from ‘introverted’ development, involving only the development personnel, and intimately involves the customer in all areas of software creation, supposedly leading to the development of a more innovative and hence more valuable information system. Open source software (OSS) development also shares two key elements of the open innovation model, namely the collaborative development of the technology and shared rights to the use of the technology. However, one shortfall with agile development in particular is the narrow focus on a single customer representative. In response to this, we argue that current thinking regarding innovation needs to be extended to include multiple stakeholders both across and outside the organization. Additionally, for firms utilizing open source, it has been found that their position in a network of potential complementors determines the amount of superior value they create for their customers. Thus, this paper aims to get a better understanding of the applicability and implications of open innovation practices in firms that employ open source and agile development methodologies. In particular, a conceptual framework is derived for further testing.