Abstract
Is open source software disrupting the software industry? If yes, how does this process work and what are its likely impacts? The purpose of this article is to explore the market effects of open source software as a disruptive innovation. The research framework it proposes accounts for the dynamic complexity of the open-source disruptive innovation strategy (DIS) of disrupter firms or communities, and the disruptive-innovation response strategies (DIRS) of incumbent software firms. The article articulates essential components of DIS and DIRS, namely new software performance dimensions and organizational innovations that open source enables. The interaction of DIS and DIRS processes through time can lead either to the failure or to the co-existence of incumbent and disrupter firms or communities. The article extends disruptive innovation theory and helps managers make sense of the complex competitive dynamics introduced by open source.