Open Source Software - or more precisely "Free and Open Source Software" (often abbreviated as FOSS) is computer software that provides its users with specific freedoms that are not usually available with proprietary software. There are various subtly different interpretations of what these freedoms should be - these are formalised in the definitions provided by two major groups:
- The Open Source Initiative (OSI) has an Open Source Definition
- The Free Software Foundation (FSF) has a Free Software Definition
The essential point is that FOSS provides you with the source code (the "blueprints" from which software is made), and the freedom to modify the software if you want to. You can even distribute these modified versions to others if you wish within certain simple to understand guidelines.
This means that software development becomes a collaborative rather than competitive process and from that collaboration comes innovation. Usually FOSS is developed because people want a specific piece of software to exist, either so they can use it or so that others may. This means that a lot of FOSS is developed in direct response to a real world need. This is in contrast to the situation where software companies develop extra features for their products that most end users do not want or use and then attempt to create a market need for that feature.
While the concept of FOSS may seem odd or even absurdly idealistic and unrealistic when you encounter it for the first time, the proof is in the fact that... it exists, and it's thriving. The FOSS development model actually works very well and has been in operation for a lot longer than the proprietary or closed source model. It does not mean that software developers cannot make money from software, it simply means that they cannot make their money by holding other business and end users hostage through complex license agreements.
Many companies large and small produce FOSS and some notable examples are LibreOffice, originally created by Star Division and Mozilla FireFox, originally created by the Netscape Corporation. Small companies can instantly gain market share by open sourcing their product, like TrollTech did with their QT Library (subsequently purchased by Nokia, and a few other sales thereafter) on which many widely used software appliations (including Skype, much of Adobe's Creative Suite, and all of the Linux-based K-Desktop Environment (or KDE). Also, users can modify or create software to fulfil their own needs, or just for fun. Users can see others use, improve and maintain this software with them.
An analogy is often made here between software and cars. A proprietary closed source computer program is like a car that is sold with its bonnet welded shut with only those who pay the manufacturer for "certification" permitted to look inside the car or to maintain it. This causes the cost of operating the car to escalate as there is no competitive pressure for balance.
FOSS is like a normal car where you choose the best and most cost effective method of maintaining it. Any FOSS developer can maintain or improve your software for you, so you are assured that you can always obtain top-quality service. This is rather than relying on the original vendor, who may choose to stop supporting you, or to manipulate the software licenses to achieve their corporate goals (typically their profit... at your expense). Even if you know nothing about engines, the fact that you can choose who maintains your car for you is a valuable thing.
With software though the situation is even more pronounced. Software is essentially information, and information is the only thing that you can give away without losing it yourself. People may borrow information from one FOSS project and include it in another without depriving the original developers of anything.
FOSS development generally proceeds at a vastly greater pace than proprietary software development because it's focused only on the software technology. It's not concerned with strategic release dates, non-disclosure agreements, corporate politics, cross-licensing deals, patent applications, marketing tie-ins, anti-copyright infringement measures, Digital Restrictions Management (DRM) and other similar anti-features which typically slow proprietary software development down, add costs, and add no value for software users. Avoiding those elements allows FOSS development to produce excellent products and has the added benefit of boosting competitive pressures and forcing proprietary software development organisations to lift their game. This results in better software quality overall which can only be beneficial for businesses and other end users.
Another good way to look at FOSS is as a community of equals. Typically there is a real-world community built around the mailing lists and support groups for any FOSS project, but more importantly, as a user of FOSS you gain control over your software. You are not simply a powerless consumer. You can, at your own discretion, take the software and use it for any purpose, provided you comply with the very simple, user-focused license terms under which FOSS is made available to you.
Some of the time, FOSS development is an art. Many developers produce their software only so that they can show it to others. They are proud of their work and want to see it being used, running on the desktops and servers of as many people as possible all around the world.
With FOSS, there's no longer a distinction between the developer and the user. With FOSS, the user is the developer, or at least has that potential if they choose to exercise it. The main thing is user agency. The user has implicit co-ownership of the FOSS they use. We hope you can now see the power behind that distinction.