Buying Behavior and Competition in the Software Market1

João Carlos V. Ferreira do Rosário, António Palma dos Reis


In the actual world, the impact of the software buying decisions has a rising relevance in
social and economic terms. This research tries to explain it focusing on the organizations
buying decisions of Operating Systems and Office Suites for personal computers and the
impact on the competition between incumbent and alternative players in the market in these
software categories, although the research hypotheses and conclusions may extend to other
software categories and platforms. We concluded that in this market beside brand image,
product features or price, other factors could have influence in the buying choices. Network
effect, switching costs, local network effect, lock-in or consumer heterogeneity all have
influence in the buying decision, protecting the incumbent and making it difficult for the
competitive alternatives, based mainly on product features and price, to gain market share
to the incumbent. This happens in a stronger way in the Operating Systems category.

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