The open source culture of code sharing results in lower development costs for the software in the first instance. That is, once one user has commissioned a specific feature or configuration option the results of that work is available to all. As a result, the more a product is used and developed within any given domain, the more widely the development costs are shared. In addition to a reduction of costs open development can significantly increase the rate of innovation as it brings together great minds to collaborate on shared solutions.
No per-copy fees can be asked for modified versions, and anyone can use the current code base to start new projects. Working knowledge can be gathered at a minimal cost. This is what made Internet software systems such an important factor in the new economy: students, and people trying new technologies were able to integrate and adopt them immediately, without the hurdles of commercial or non-disclosure licence agreements. In addition, the right to freely modify them allowed for the incredible expansion in the number of communication protocols and systems, each perfectly tailored to the needs of their users. This is also a reason for the overwhelming success of the Linux kernel, widely employed by students thanks to its near-zero cost, and subsequently used by the same students in the startups originated by them, when they turn into entrepreneurs after leaving University.
Between the purchase price of the software itself, the exorbitant cost of mandatory virus protection, support charges, ongoing upgrade expenses and the costs associated with being locked in, proprietary software takes more out of your business than you probably even realize. And for what? You can get better quality at a fraction of the price.