This is a good post from Jonathan on free software. It is good because of one phrase he uses in justifying giving away software, "it amplifies adoption". To grab the new customers, to get the software in the hands of the folks who will be working with it will be the key in the next few years for gaining market share and keeping existing market share. A developer, an architect, a programmer will always tend to recommend, lean toward a solution that they are familiar and comfortable with.
If you are a software vendor with closed source and your strategy for the next few years is to keep it that way, I think we can all see the ending. There is no longer a middle ground for software vendors. There is the upper tier ie IBM, Oracle, Microsoft and then there is everybody else. Everybody else is competing with open source solutions. Competing with solutions that are "good enough". Even the upper tier players are feeling this affect. But the lower and middle tier vendors tend to have a more fragile bottom line that is greatly affected by even a percentage point or two in market share.
Another thought on this. Companies that can successfully implement a changeover to a SOA style of architecture will make this even worse for the lower and middle tier vendors. A SOA based upon the WSF standards and good design principals will make it easier to swap out vendors.