I was thinking through the open source diffusion model over the last few days, and put together this slide. It's not groundbreaking by any stretch (Larry Augustin and John Roberts are much more articulate on this point than I am), but it reflects the way open source spreads.
On the open source side, you start with users and then convert them into customers. On the proprietary side, you start with marketing and sales to create customers. No users until they pay.
The key point here is in the difference in focus. Both groups - proprietary and open source - care about customers. You have to or you go out of business. Nothing revolutionary in caring about customers.
But the proprietary world has a model that puts it at a disadvantage with open source. (Yes, Savio, I know. Stop that smirking! :-) It's insistence on hoarding IP means that the only way to goose adoption is through hefty sales and marketing costs. Free, as it turns out, is a great price to encourage distribution.
Don't believe me? Ask Javier at Hyperic what kind of response he's had to releasing his product under the GPL. Or take a look at Alfresco's spread of its web content management product since its launch earlier this year. Over 8,000 installations (active) in just three months of having a stable product out:
You don't get that kind of spread if the fundamental premise behind your distribution process is hoard first, give (in highly limited fashion) later. Let freedom ring.