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strategic lever in attaining early profitability. Cleartrip, being a startup firm, had to
build scale rapidly in order to achieve profitability. Technology is a core element in
the OTA industry and was a big contributor to the cost structure of the firm. Thus,
apart from achieving scale, cost cutting was an important lever to achieve prof-
itability. Achieving high ROI from their technology investment was thus essential.
Use of open source software helped them achieve this, resulting in their technology
expenses being significantly lower compared to competition. In the case of Just-
Dial, the cost advantage of open source provided JustDial with the ability to do vast
in-house development and build a superior technology platform to support the nu-
merous business demands without the worry of astronomical IT development costs.
10.4.7 Types of Reuse
A common type of reuse was mixing and matching of different open source compo-
nents to achieve flexibility and superior performance. This ability to mix and match
coupled with the superior building blocks allowed firms to innovate. Crafting appli-
cations by stitching together a diverse set of best-of-breed open source components
was a common strategy adopted by most of the respondents.
The ability to modify the FOSS components, not just in the periphery, but also
core components that allow the fine tuning of the system functionality for spe-
cific performance requirements is another instance of strategic reuse. As an ex-
ample, JustDial wanted to deploy a performance-intensive search engine. They
achieved this by customizing the Ubuntu operating system to tightly integrate with
the Mozilla browser and thus obtain superior performance: an ability not easily ob-
tained when developing with proprietary software.
A third kind of reuse was that of knowledge embedded in the open source code.
Visibility to the source code, rich in diverse algorithms and logic was reported as a
significant advantage from reusing FOSS. Not only were firms able to reuse pieces
of quality code from this repository, they were also able to reuse knowledge embed-
ded in this code. Access to specific algorithms and their logic enabled firms to build
on them and develop new and innovative ideas.
10.5 Conclusion
We start by answering our first research question on whether firms reuse FOSS to
gain strategic advantage. The findings of our survey indicates an affirmative answer.
The previous section provides evidence of firms reusing FOSS to gain strategic ad-
vantage. For achieving a sustained competitive advantage, firms need to develop
superior IT capabilities: specifically, a rent-generating resource that is not easily
imitated or substituted [
1
]. It can be seen that these capabilities consist of not just
IT resources but includes a combination of complimentary human and business
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