Open Source Software (OSS) is typically viewed as a cooperative approach for software development and hence, more of a technology rather than a business model. Yet, there is an increasing number of profitable activities around the OSS ecosystem, proving that OSS is not only an innovative model of production, but also a sustainable business model. OSS creates value both on the supply and demand sides and an increasing number of firms are deploying their strategies around this value with considerable profits.

Although it seems that OSS does have an impact on software markets, there is little scientific evidence for that and no evaluation on the degree of influence for software markets. Towards this direction, this paper examines OSS economic attributes and their correlation with software markets’ special characteristics that affect competition. Competition under the scope of OSS is further explored by identifying the new dynamics formed in software markets. In order to further validate our results, the HHI concentration index is applied to three widely used software market segments.