"Linux functionality leapt forward because customers could develop what they wanted, and Red Hat could help share it,"
This is the main argument pushed by Open Source, and for many things it is the correct argument. However many of the big dollar software packages are not represented well through open source. Things like exchange, SAP, CRMs are core business applications that techies have little interest in developing free competing products.
Open Source is good for techies developing for other techies, but that is where OSSs usefulness ends.
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