This paper examines the disruptive impact that open source (OS) software has on the mainstream software market within the period 2001 - 2003. The findings indicate that the stock market reacted negatively when the strategic responses of closed source incumbents were antagonistic to open source despite their relentless effort and investment in product and service enhancement. Whereas their counterparts that embraced open source were most likely to perform well on the stock market and successfully enter into the emerging new markets.