Updated 2/25/2007: Corrected url.
This page has an eloquent explanation of some of the motivating factors behind the open source movement.
In case you aren’t a computer geek, the term open source (free software is another name) refers to computer programs that you can download and share with your friends. Licenses vary, but a common one (the GPL) specifies that you can do whatever you want with the software that is licensed under it, but if you redistribute any changes, you have to make them available under the same terms that the code was originally made available to you.
Some software is core business software. I was talking to a consultant who dealt with telecommunications companies. Their billing and minute tracking software really is part of their core competency. You can use that software to actually make the company more efficient in scalable ways. Ditto companies that make pace-makers–the software is entwined with their hardware and is really integral to the product.
But for many businesses, there are huge swathes of software that aren’t integral in the same way. Their needed, but for their supporting functionality, not for the processes that they enable. For example, the web server that hosts a company’s web pages is not integral. The office suite is not a fundamental part of your business processes. The macros and files and VB programs that you write on top of an office suite probably are, but the bland office suite is not.
When software is written that defines a business process, then it is integral. When it’s a supporting platform for the business process, it’s not. And, as Bruce argues in the article above, when it isn’t integral, there are very good reasons to push the software out into the world and share the cost of maintenance.
Oh, and any discussion of open source software would be remiss if it didn’t link to The Cathedral and the Bazaar.