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A systems analysis perspective is adopted to examine the critical properties of the Free/Libre/Open Source Software (FLOSS) mode of innovation, as reflected on the SourceForge platform (SF.net). This approach re-scales March's (1991) framework and applies it to characterize the "innovation system" of a "distributed organization" of interacting agents in a virtual collaboration environment, rather than to innovation within a firm. March (1991) views the process of innovation at the organizational level as the coupling of sub-processes of exploration and exploitation. Correspondingly, the innovation system of the virtual collaboration environment represented by SF.net is an emergent property of two "coupled" processes: one involves the interactions among agents searching the locale for information and knowledge resources to use in designing novel software products (i.e., exploration), and the other involves the mobilization of individuals' capabilities for application in the software development projects that become established on the platform (i.e., exploitation). The micro-dynamics of this system are studied empirically by constructing transition probability matrices representing the movements of 222,835 SF.net users among 7 different activity states, which range from "lurking" (not contributing or contributing to projects without becoming a member) to "laboring" (joining one or more projects as members), and to "launching" (founding one or more projects) within each successive 6-month interval. The estimated probabilities are found to form first-order Markov chains describing ergodic processes. This makes it possible the computation of the equilibrium distribution of agents among the states, thereby suppressing transient effects and revealing persisting patterns of project-joining and project-launching.