O'Reilly Network: [Tim O'Reilly:] Secrets of Successful Free Software Businesses "Free software and open source tend to:
1. Fill niches where commercial vendors haven't yet identified a market. (This is my alpha-geek argument). Hackers build tools that vendors don't yet supply. When the market gets big enough, vendors go after it with tools that make it accessible to a wider audience. If the vendors were blind long enough, then the free software may have become too widespread to displace, in which case the dynamic below kicks in.
2. Commoditize markets. (The open design of the IBM PC is an even better example than Linux, which hasn't yet succeeded to the same level.) In commodity markets, brand, being the lowest cost provider, and supply chain management become more important advantages than controlling IP.
3. Allow people versed in computers to share information more easily, lowering the barriers to entry and advancing innovation. This is open source as the late 20th century equivalent to the long tradition of scientific publishing."