I don't think "original developer" means the person who actually wrote the code. I think original developer means vendor. 
Their point is keeping software proprietary is the better strategy if a vendor wants to capture value (i.e., make big profits). Making software open source is the better strategy if a vendor wants to create value (i.e., making a product that users really like).  
I'll definitely check out the chapter you recommended.
Thanks,
Kelly
-----Original Message-----
From: web400-bounces@xxxxxxxxxxxx [mailto:web400-bounces@xxxxxxxxxxxx] On Behalf Of Thorbjoern Ravn Andersen
Sent: Monday, January 11, 2010 12:46 PM
To: Web Enabling the AS400 / iSeries
Subject: Re: [WEB400] Mixed Source (Was RE: Code donations for RPGUI initiative)
Kelly Cookson skrev:
I came across an interesting article that discusses mixed source--the attempt to find business models that mix open source and proprietary software\services.
  
This sentence in the executive summary "Proprietary software, on the 
other hand, results in superior value capture because the intellectual 
property remains under the control of the original developer. " shows to 
me that those who wrote the article ... ehm, how shall I put it ... has 
not fully done their homework.
I'd be happy to give my thoughts.  Just for the record, I personally 
believe strongly that _using_ open source software allows us to create 
better software.  It is up to the decision makers whether we should also 
_write_ open source software.
I would suggest you think a bit over what it is you want to do, and 
_WHY_ as that decides a lot of your options.
To give you food for thought I would suggest you read this chapter from 
Eric Raymond about various ways to make money anyway from Open Source 
software.
http://catb.org/~esr/writings/cathedral-bazaar/magic-cauldron/ar01s09.html
Here are the headings:
Loss-Leader/Market Positioner
Widget Frosting
Give Away the Recipe, Open a Restaurant
Accessorizing
Free the Future, Sell the Present
Free the Software, Sell the Brand
Free the Software, Sell the Content
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