Porter s Five Forces Model Analysis of China s Open Source Software Industry

Mondo Workplace Updated on 2024-01-31

Porter's Five Forces Model Analysis of China's Open Source Software Industry

1. The bargaining power of the leading businessmen in China's open source software industry

For open source, the company plays the role of both a developer and a collaborative partner on which its own open source project depends. The size of a bargaining power is often consistent with its market position. Generally speaking, open source software is generally used as a way to break the monopoly of private software vendors.

In today's Internet economy, open source software is still regarded as an effective way to serve the best users, in order to aggregate users and various data, so as to further significantly improve the bargaining power of the first business or service provider. Relevant examples are Google, IBM, SecondLife, Yahoo!and Facebook, etc.

2. The bargaining power of consumers in China's open source software industry

The application fields involved in open source products can be very wide, even broader than the fields that may be involved in specialized software, so for users of open source software in such a wide field, it may not be possible to establish an exact relevant economic model.

The situation is very different if the focus of the discussion is not on "customers" but on "users". As users of open source software, they have strong bargaining power. They can be said to be the decisive factor in the success or failure of open source products, so how to protect the interests of users and encourage them to use open source software is the key attitude that open source software developers should have, although this is easier to say than to do, but it is understandable that this is a basic starting point for us to do open source software.

Click here to view the "2023-2028 China Open Source Software Industry Market Prospect Analysis and Investment Strategy Analysis Report".

3. The threat of new entrants in China's open source software industry

Based on the theory that no project succeeds in a non-competitive environment, the Linux kernel is an exception. Obviously, there are many kernels such as Hard, BSDS, ReactOS, and FreeDOS, but none of them have achieved such a wide impact as the Linux kernel with little hardware support. Its dynamic development features and its flexibility, from the smallest processors to the HPC clusters used in Linux, make it an easy leader in the kernel space. It is now more developed and officially supported than any other open source kernel.

However, even if it has become a leader in the field, it also faces threats from new entrants in the field. There are many companies around Linux that provide services for it, these companies may be some small companies that provide driver development or provide kernels for some embedded products, and their common feature is that none of them have a monopoly tendency in the provision of services or products, so it is convenient for some new entrants in this regard, because the goal of open source is: to oppose market blockade and monopoly.

In addition, of course, there are companies that have a very good market position or have the ability to make a good profit margin on their services or products.

Fourth, the threat of alternatives to China's open source software industry

Open source software is often used as a substitute for proprietary software, but on the contrary, proprietary software is hardly a substitute for open source software. There is also competition in different open source products about who will be the substitute for whom. For mature software markets, such as operating systems, databases, middleware, etc., the threat of alternative products will tend to decline when the product is gradually standardized and the software itself becomes a commodity. However, in areas such as web20 type of emerging market, where there are many different standards and technologies that exist and compete with each other, the threat of substitutions is bound to remain high.

5. Competition among existing enterprises in China's open source software industry

The intensity of competition from incumbents is linked to the maturity of a particular market. In new and evolving markets, the intensity of this competition is much stronger than those that have long matured or have begun to shrink. The same applies to the open source software market. Open source software usually appears as an active participant in emerging markets, for example, open source software plays a very important role in bringing the Internet into the market with its rapid innovation and low threshold in the market.

At the same time, open source software is available for the Internet software market as well as in the current web20 sports create great opportunities for competition. However, for software markets such as mainframes, open source software is still inactive, and therefore less competitive.

6. Summary of the competition status of China's open source software industry

In recent years, China has further increased international cooperation in open source software. At present, China has strengthened international exchanges in finance, education, e-government and other fields through seminars, seminars and international project cooperation, and promoted the application and promotion of China's open source software achievements. For example, the Northeast Asia Open Source Software Promotion Forum, co-hosted by China, Japan and South Korea, has been held for 11 sessions, and the open source industry cooperation among the three countries is moving forward steadily. China also held the "Open Source China Open Source World Summit Forum", bringing together the world's top open source software experts, business executives, open source advocates enthusiasts, and relevant domestic leaders and major user groups to form a high-end communication platform.

In addition, China is working with other international organizations and foreign companies to develop some open source software products. According to Xu Hongbo, China's chief representative of the EU's Qualisso Open Source Software Competitiveness Center, China has now joined the largest open source software quality assurance platform project in the history of the European Union. Through this project, China can work with the EU to create an international standard for the open source software industry.

It can be seen that international cooperation is not only a kind of learning, but also a kind of motivation. The development of China's open source software industry and the development of the global open source software industry are mutually reinforcing.

China's open source power has risen rapidly, and it has become the fastest growing region in the world in terms of open source contribution, with huge market potential. China has the world's largest developer group, and the contribution rate of the international mainstream platform continues to rise, a large number of outstanding domestic open source enterprises to the forefront of the global IT industry, with open source hardware, open source software as the technical basis, the use of artificial intelligence, big technology, cloud computing, 5G, Internet of Things, blockchain, industrial Internet and other new generation of information technology to actively participate in the global open source ecology. In these cutting-edge technology fields, many excellent open source projects have been created or led by Chinese developers.

Whether it is the independent open source project of domestic enterprises, or the project donated to the international and domestic mainstream open source society, the number continues to grow, and there are projects that have successfully graduated from the first class and become top projects. The commercial value generated by these excellent open source projects has gradually been recognized in the domestic market, and a number of start-ups based on these open source projects have obtained multiple rounds of investment and financing, entering a stage of rapid development.

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