Open Source software:
http://opensource.org/: The open source initiative
http://www.fsf.org/ : the Free software foundation
http://www.gnu.org/philosophy/free-software-for-freedom.html :GNU not unix
http://www.fossfa.net/ Free open source foundation for africa
These links above are just a few of the organizations that have been created to organize, protect and promote the idea of open source software. If you spend a few minutes reading on some of these sites you will quickly encounter the idea of "Free" as in free speech and not "Free" as in free beer. The idea is that the software is not ideologically limited in any way. The motivation for creating and maintaining the software is the it will perfectly fit the problem and not that some aspect of it will be contrived in some way to generate income.
This ideal has been achieved in many cases. There are several pieces of open source software that have been adopted by the world of business as industry standards, where no proprietary software has been successful. There are also several very popular open source programs that have emulated(copied) the functionality of popular proprietary software and these provide an alternative to the paid programs.
The Software in the open community is often supported by a business that also has paid products or sells services in support of the free to own open source software. for example Sun Microsystems created Java and VirtualBox, they sold servers and workstation hardware with a distribution of Linux called Solaris to pay the rent and made Java and VirtualBox Free and open. Oracle has since purchased Sun Microsystems and have continued to support free, open source software along side their other commercial software systems.
Cannonical is a commercial enterprise started by Mark Shuttleworth. Cannonical supports and actively develops the Ubuntu distribution of Linux, which is free. Cannonical also sells hardware with Ubuntu preinstalled (Mostly servers) and they also offer a support services to the users of Ubuntu. There are many examples of large open source projects that are funded by commercial activities.
Proprietary Software:
This is software that is produced by a business where the source code is kept in the business and only the compiled programs are distributed, either on CD or DVD or via download. This business model works quite well in some markets because there are many people who do not see open source software as a viable alternative. Most people prefer to pay for software and have the peace of mind that if something does not work then they will have a business to go back to and demand support, or a refund. Microsoft has been the world leader in the operating system marked for 30 years with their proprietary software (windows). Microsoft have also lead the productivity tools market with the Microsoft office suite of programs. As long as Microsoft keeps their source code safely locked away no one else can make any changes to the code or produce their own build of Microsoft products. It is quite possible and legal for anyone who has the urge to sit down and create their own version of a word processor that has all the same features as Microsoft Word and can even read and create Microsoft word documents. This is because Microsoft do not own the idea of a word processor or a spread sheet. There are several open source alternatives to Microsoft office that are reasonably cross compatible with Microsoft products.
summary:
The common perception is that proprietary software is more robust and better supported and that open source software is unstable and poorly supported.
There will always be a market for proprietary software in certain categories of programs
Open source software is growing in the market place, many enterprises are comfortable with the support of open products and are benefitting from the lower cost of ownership.