The real costs of using Open Source are considerably less than for Proprietary Software, and Open Source allows companies greater freedom to modify it to meet their own particular needs.
Increasing numbers of companies are being created based on the use of Open Source software and resources available via the Internet (often themselves based on open source!), that reduce startup costs considerably, but that most fail or are barely viable. However, there are some spectacular successes - driven by the increased rate of innovation fostered by adopting the Open Source approach.
As Matt Asay says (10-Dec-09):
That certainly seems to be one lesson to take from the success of Linux, Firefox, and other open-source projects, particularly those that are community-led, as opposed to company-led. It's hard to compete with a group of self-selected, highly focused developers who can focus on good code, not good financial quarters.
But it's equally true of relatively new companies like Salesforce, Red Hat, and Google, which have eschewed gimmicky software and flimsy business strategies to give customers tangible, ongoing value. None of these companies sought an early exit through acquisition. None of them were content to build for the quick flip.
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