Microsoft has agreed to share the Windows source code in a proposal to the Indian ministry of information technology, which the president of MS India confirmed. The article speculates that this comes at a time when governments in India are considering Linux because the source code is free and downloadable from the Internet. The end of the article explains that open source is preferred because it allows for innovation of the code from a broad base of users, but that proprietary interests insist that open source can't work in a commercial environment.
There are a couple of recent papers on Open Source:
Yochai Benkler, an NYU Law Professor, has published "Coase's Penguin, or, Linux and The Nature of the Firm (PDF)" explaining "commons-based peer production" for open source software and how the "information opportunity cost" for closed source development is too great a burden for an innovative society to carry, if the "object of production is information or culture". He takes the title from Ronald Coase, author of "The Nature of the Firm" and the penguin symbol used for Linux.
Eric von Hippel at the MIT Sloan School of Management has another interesting paper "Horizontal innovation networks - by and for users" looking at the economic advantages of user innovation networks in open source development.
Benkler goes on to say: "First, it is better at identifying and assigning human capital to information and cultural production processes. In this regard, peer production has an advantage in what I call "information opportunity cost." That is, it loses less information about who the best person for a given job might be than either of the other two organizational modes. Second, there are substantial increasing returns, in terms of allocation efficiency, to allowing larger clusters of potential contributors to interact with large clusters of information resources in search of new projects and opportunities for collaboration. Removing property and contract as the organizing principles of collaboration substantially reduces transaction costs involved in allowing these large clusters of potential contributors to review and select which resources to work on, for which projects, and with which collaborators."
Von Hippel elaborates, "These horizontal user innovation networks have a great advantage over the manufacturer-centric innovation development systems that have been the mainstay of commerce for hundreds of years: they enable each using entity, whether an individual or a corporation, to develop exactly what it wants rather than being restricted to available marketplace choices or relying on a specific manufacturer to act as its (often very imperfect) agent. Moreover, individual users do not have to develop everything they need on their own: they can benefit from innovations developed by others and freely shared within and beyond the user network."