Microsoft will always beat Open Source

In a new report, professors Pankaj Ghemawat and Ramon Casadesus-Masanell have sat down with their books of economic formulae and come up with a stinging rebuffing of the Open Source phenomena.

Ghemawat and Casadesus-Masanell decided to look at the Open Source versus Vole in terms of competitive dynamics and ask if OSS ever displace traditional software from market leadership.

In their concisely titled academic paper 'Dynamic Mixed Duopoly: A Model Motivated by Linux vs. Windows', the authors believe neither side is likely to be forced from the battlefield, but Vole will always be the leader.

This was a bit of a surprise to them, because when they started they thought that network effects and demand-side learning would result in Linux forcing Windows out.

It turned out that they had failed to realise that a larger installed base together with its pricing power allow the company to price strategically to control Linux's market share.

Lowering the price of Windows would cause the demand for Linux to shrink to a point where it is not a threat, they said.

There is an interview with the report's authors here. µ