All software is written with source code. With open source software, the code is protected by a special license that ensures everyone has access to that code. That means no one company can fully own it. Freedom means choice. Choice means power.

That’s why we believe open source is inevitable. It returns control to the customer. You can see the code, change it, learn from it. Bugs are more quickly found and fixed. And when customers don’t like how one vendor is serving them, they can choose another without overhauling their infrastructure. No more technology lock-in. No more monopolies.

And we believe open source simply creates better software. It multiplies one company’s development capacity many times over. Everyone collaborates, the best software wins. Not just within one company, but among an Internet-connected, worldwide community. It’s no coincidence that the rise of open source closely followed the rise of the Internet. The perfect breeding ground for collaboration, the Internet moves ideas and code around the world in an instant.

As a result, the open source model often builds higher quality, more secure, more easily integrated software. And it does it at a vastly accelerated pace and often at a lower cost.

The open source model is built on the premise that companies like Red Hat must consistently serve customers through extraordinary value, performance, and ease of integration and management. Or they can choose another vendor.

In the proprietary model, development occurs within one company. Programmers write code, hide it behind binaries, charge customers to use the software–then charge them more to fix it when it breaks. No one ever has to know how bad the software really is.

The problem worsens when you become tied to a company’s architecture, protocols, and file formats. Bruce Perens calls this the addiction model of software procurement Any model that puts customers at such a fundamental disadvantage is conceptually broken.

Open source is not nameless, faceless, and it’s not charity. Nor is it solely a community effort. What you see today is a technology revolution driven ever forward by market demand.
The concept behind open source is not new. For centuries, universities and research communities have shared their work. Monks copied books by hand. Scientists publish new discoveries in journals. Mathematical formulas are distributed, improved, redistributed.

Imagine if all of this past knowledge was kept hidden or its use was restricted to only those who are willing to pay for it. Yet this is the mentality behind the proprietary software model. In the same way shared knowledge propels the whole of society forward, open technology development can drive innovation for an entire industry.

For more Imformation:
http://www.dwheeler.com/oss_fs_why.html
http://www.opensource.org/
http://en.wikipedia.org/wiki/Open_source