Open Source software plays no small role in this push: Microsoft foresees Linux, the Open Source operating system, gaining market share at a faster rate than Windows. CFO John Connors projects the number of servers running on the Linux platform in 2004 will jump by 24%, far outpacing Microsoft's 9.5% projected growth. At a time where every corporation is focused upon cost savings, any strategy which insists users pay for non-essentials is open to criticism – especially when the cheaper alternatives are gaining credibility.

Some confuse Open Source with Freeware, looking solely at the cost of the software license. But when the Open Source Initiative (OSI) talks about its definition of Open Source, the word free is associated with the freedom of use rather than the cost of the software. For example, vendors like RedHat and IBM have their freedom to make money out of selling Linux solutions, but they are required to release all their derived works under the same license. The thinking behind it is quite simple, quoting from OSI’s website, “When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, people adapt it, people fix bugs.” In the ideal world, this is a fantastic way to develop great software collaboratively and have attracted a huge number of top academics to participate. Successful examples are Linux, Apache, MySQL, Mozilla and many more.

The maturity and growing acceptance of Open Source software has enabled service providers to come up with more attractive deals for its users as they can now choose to bypass massive licensing fees for software which are replaceable with Open Source alternatives without jeopardising reliability and functionality.

However, SCO Group's $1 billion lawsuit against IBM for allegedly giving away trade secrets in its Linux programs is opening up new questions on the competition of Open Source. Proprietary software industry and intellectual property (IP) rights holders seem unwilling to forsake their established pricing model without a fight.

Whilst IBM was launching its countersuit, SCO introduced a licensing plan for Linux users to run in full compliance with SCO's IP rights claim. Red Hat Inc. quickly filed a formal complaint against SCO to inject confidence back into Linux.Some saw SCO’s move as a desperate attempt to cash in on the unclear legal situation. Remember British Telecom’s attempt to cash in on Hyperlinks?

Of course, this all sounds very familiar in the digital industry. Since everything can be easily copied, byte for byte, fighting over IP rights is common. It is hard to find any successful software firm which hasn’t been involved in IP battles. The biggest of them all, Microsoft, is currently facing a case with InterTrust Technologies on Digital Rights Management patent infringement. If such claim is valid, the impact to Microsoft’s product line, from Windows to Xbox, will be immense.

Open source – and along with it a service orientated approach – is here to stay. Claims that free software capable of running an entire IT system (even up to enterprise level) is available have increasing credence. This is not just a good thing for now; it is a sign of things to come. One day, most common software will be bundled into whatever service package you subscribe to. On a pay-per-use basis, of course.