Open to Misinterpretation
Before "open source", before free software, there was software in the public domain. You could say that software in the public domain was truly free. The code was "open source" and the user had the right to take it, break it, appropriate it, re-use it, package it, sell it, re-brand and license it, or do what you will with it.
The problem with software in the public domain, was that, more often than not, any changes to the software didn't come back to the developer in any usable form, and modifications didn't revert to the original maintainer of the code. In some cases the software was appropriated and relicensed by the user. In other words there was no guarantee that the software would remain free, or would grow.
The solution to this problem was the GPL. Not only did the GPL protect free software and keep it free, but it opened the door for a community to form around the software in the knowledge that contributions were fed back into the original body of code. The often criticised "viral" nature of copyleft and the GPL was the instrument that fostered participation and feedback from the community, and provided the framework for the later success of free and "open source" software.
Not only did the GPL encourage the growth of free software projects among the usual suspects, but it also worked to the advantage of the corporate interests that later became central to the push of GNU/Linux into the enterprise.
Most of these corporate interests had their fingers burnt with the fracturing of Unix and "open" standards during the eighties and nineties, precisely because there was no framework (such as the GPL) to tie the code together.
Solaris, which was developed by Sun Microsystems, wasn't quite like Irix (SGI), which wasn't quite like HPUX (HP), which wasn't quite like AIX (IBM), which wasn't quite like Tru64 (DEC), and none of them necessarily played well together... Unix had been touted as the universal operating system, and each of these companies was pouring huge resources into developing proprietary versions of the same operating system at the expense of the hardware, services and userland software that were their core business.
The arrival of GNU/Linux opened up new possibilities. Once more than one hardware company had formed a commitment to Linux it became obvious that there was a mutual advantage in contributing back to the project, and they did. The framework that made this possible was the GPL. The release of core chunks of corporate code accelerated the development of Linux and ensured its success in the enterprise. Since then, companies like JBoss have been able to prove that middleware (and userland) products released under free software licenses can provide a highly competitive (and profitable) business model. Free software is on the rise, and is moving up the stack.
But there is a fly in the ointment. In the late nineties some of the prominent figures who had emerged out of the noise surrounding Linux convinced themselves that the GPL was too "extreme" and would frighten business. Others felt that "open source" was a less ambiguous and more comprehensible description than "free software". Their answer was the formation of the "Open Source Initiative" (OSI) in 1998, and the encouragement of a more liberal licensing regime, based on the premise that "open source" methodologies produced better software, rather than the notion that software should be "free" - whereas free software advocates see "better software" as an incidental, if desirable, side benefit of free software.
As a term, Open Source has a nice ring to it. Open source has caught on as the safe way to describe free software. Free software has an ideology, a philosophy and a license that were developed over a number of years in response to the problems encountered in furthering the idea that software should be free. Open source, on the other hand, has no connotations beyond the visibility of the source code, and is said, for this reason, to be more friendly to business than "free software". However, it isn't at all obvious that this is true, and there is plenty of confusion as to what differentiates open source from free software... or public domain software... or attribution software... or BSD licensed software...
The great majority of the better known and more successful "open source" projects are released under the GPL, and can be described accurately as free software. JBoss (now owned by Red Hat), for instance, has always described itself as "professional open source" but has released its software under Free Software Foundation (FSF) licenses.
An accidental side effect of the popularity of "open source" has been a proliferation of licenses that describe themselves as "open source", some of which aren't necessarily compatible with each other and may or may not be recognised by the OSI, and many of which contain proprietorial clauses that don't always work to the advantage of the licensors or the licensees.
The term "open source" has at times been misused by companies who want to gain the benefits of a wider developer community. More often than not this has arisen from a misunderstanding of the full implications of "open source" and "free software", and how the licensing can work to the developers' advantage. The greatest lesson to be learnt from the success of GNU/Linux is that the GPL is more than just a license. The so-called "viral" nature of the license serves to bind community and code together. JBoss is a perfect illustration of the truth that if you are going to describe yourself as "open source" and encourage a truly thriving community you have to be uncompromisingly so, or you are nothing at all.
One company that has suffered from "open source" licensing problems is SugarCRM, which ran into discontent from its own developer community. The solution for SugarCRM has been to relicense its source code under the GPLv3. The GPL is unambiguous and certain, and gives access to code, support and resources way beyond the limitations of the immediate project.
If a company wants to dip its toes into "open source" the best advice is to research the business, be uncompromising, and use the GPL. The loose cascade of "open source" licenses has become a confusing distraction. One of the many ironies of this story is that the term "open source" was adopted because of the feeling that the word "free" in "free software" was open to misinterpretation. The term "open source" now suffers from a similar confusion. For instance, the OSI now approves 59 different "open source" licenses (at the last count), each of which has its own captchas, and few of which are truly compatible with the GPL, (and many of which are "owned" by the same companies that fractured Unix). This doesn't serve the best interests of free or open source software, the developers, the users, or the companies that hope to take advantage by being part of the "open source" revolution.
The best known proponent of "open source" (as opposed to "free software") is Eric Raymond. Raymond is a talented writer and self publicist. His supporters, who seem to be less in number than once they were, habitually describe his stance as the moderate alternative to the perceived asceticism and "extremism" of Richard Stallman. Stallman is stubborn and is sometimes said to be "difficult". Extremism, however, lies in the eye of the beholder.
Raymond's stance is more oblique. He has devoted much of his time during the last few years to other interests, but every few months has issued an utterance which can be taken as an attack on "free software", that the GPL should be dropped from the Linux kernel, that the use of closed source blobs, which everybody else has been trying to escape from, should be encouraged to further hardware support, and so on.
One of the reasons Raymond gave for abandoning the Red Hat sponsored Fedora distribution in February, 2007 was the "failure to address the problem of proprietary multimedia formats with any attitude other than blank denial." Alan Cox, a Red Hat employee and senior kernel developer, responded: "That would be because we believe in Free Software and doing the right thing (a practice you appear to have given up on). Maybe it is time the term "open source" also did the decent thing and died out with you."
And he has a point. Maybe there are good reasons for arguing that the term "open source" has outlived its usefulness, and has resulted in a dilution of the principles behind free and open source software. Maybe the time has come for a "Free Software Initiative", to encourage business friendly projects to realise that their future lies in the unambiguous world of Free Software under the uncompromising umbrella of the GPL. In so doing, they can confront more effectively "the problem of proprietary multimedia formats" and broken interoperability standards, and at the same time be more business friendly than under the broken sobriquet of "open source"...