It is reasonable enough to attribute the evolution of Free and Open source Software to the hobby projects as the software has evolved from basic hobby projects to complex business models. Initially the software was perceived to be suspicious by the people related to Information systems but later on it became acceptable. Nowadays the software is turned into an extremely beneficial and favorable one. Initially the companies were used to avoid the use of software and some of these companies even banned them to avoid legal and security risks. Open source is closely related to innovation paradigm as it is simply a specific case of it being a form of open innovation. To ensure the long run survival in the industry and to make sure that the company remains at competitive advantage it is inevitable for the enterprise to make use and take advantage of rapid innovations. These days companies not only depend on the traditional closed innovation models they were used to rely in past.
In closed innovation models companies were used to keep the innovations made by them secret and strictly avoid leakage of information to the outside world. In the end of twentieth century the information diffusion was just started as in 1990’s there happened rapid and dramatic information diffusion. New innovations were developed in the research labs funded by the companies with the view to achieve competitive advantage. Then the innovations were used in their products and after selling these highly advanced and innovative products companies kept on using the revenues to finance further research and development projects.
In order to explore different and unique ways to ensure competitiveness and effectiveness of innovation processes being followed by the companies, they started to rely more on open innovation rather than closed innovations. Meanwhile Chesbrough presented a new and more effective approach to open innovation describing that in addition to internal ideas firms should also take advantage of external research and ideas to make the business more profitable. Along with increasing search of new ideas and technologies lying outside the firm, the firm should also pay attention to the cooperation among different competitors and suppliers. All this will contribute to generate additional value creation for the respective customers.