I've posted and made comments several times in the past about open source not just being a license model. I'm going to explain a personal view of this.
I believe that the use of a free and open standard (HTTP) accelerated the adoption of the world wide web in a manner that had not been achieved previously with any proprietary service. Why?
If a company invents something novel and new (a potential source of competitive advantage or CA), the tendency is to maintain control over that invention (either through patents, or secrecy or some other process). There is however the inevitable cloning of a good idea (as consultants move from one company to another), the eventual creation of a standard product and if useful enough the eventual conversion to a common and ubiquitous standard or commodity (often a cost of doing business or CODB).
All of this takes time.
By creating a free and open standard, you circumvent this process and this allows for the faster adoption of an idea as a common and ubiquitous standard - if it is useful enough. This is what I believe happened with the world wide web, the act of Tim Berners Lee releasing HTTP as a free and open standard accelerated the adoption of a good idea. Had he not done so and instead a proprietory licensed HTTP been released, I doubt I would be blogging today.
Once something is common and ubiquitous we tend to worry less about it and focus our creative energies on the novel and new. It would be pretty difficult to start building a virtual web business today, if the first things you had to concern yourself with were chip manufacture, building an electricity generation system and network lines and network equipment connected to your end users.
Hence I'd argue that the process of moving from CA (competitive advantage) to CODB (cost of doing business) drives innovation. Furthermore the real power of these "infra-structural" ideas can only be realised when they are adopted by a society at large e.g. national energy standards for power transmission, national transport standards for railtrack widths and so forth.
The reason I can catch a train from London to Glasgow, is principally down to such agreed standards - the Gauge of Railways Act, 1846.
This is why in my view open source is such a powerful force. It circumvents the traditional process and has the potential to drive an idea to become common and ubiquitous, an adopted emergent standard. This drives further innovation to the next idea and so forth.
Of course, just open sourcing an idea is not enough. It needs to be a good enough idea that a community will want to adopt it, and be involved with it. The internet and the world wide web were not only examples of such good ideas but also created new means for such communities to communicate. This created new social networks, which are themselves another source of idea generation.
So three factors seem to have been at play - first an idea for a new way of communicating was rapidly spreading due to its free and open nature. Secondly the new form of communicating was allowing new social networks to form and hence new ideas to be created. Thirdly many of those new ideas were themselves "open sourced" and quickly spreading.
Now the concepts of free software (as in speech not beer) were established well before this. However the development of the world wide web helped to spread the paradigm of open source not only in software but into other areas - such as user content. New ideas such as agile development have also propagated by such means.
Of course it didn't stop there nor were these new formed social networks limited to technologists, and why should they be? The basic principle is that freely sharing your work and ideas with others helps generate more ideas - this is applicable to any field.
So how does a business compete in such a world where ideas are so freely shared? Well it's not ultimately through controlling the spread of an idea, but instead through providing a better service. The old processes where an idea was controlled by the limited few and drip fed into the world are starting to crumble. Whether we are talking technology, arts, science, business, politics or news - open and free content, new social networks and consumers as producers are breaking down these old boundaries.
In this world the old, more established, more defined processes are being replaced with a much more dynamic system. For example, new forms of commerce such as threadless.com, where end users are more actively involved in the production of goods rather than just being passive consumers.
This is why I say that conversation is becoming as, if not more, important than the product. You need to strike up that conversation with your customers before someone else does.
As a company you'll also need to find ways of releasing the ideas within your organisation as competitors become more agile in business. Open source and virtual niche business models are just around the corner whilst manufacturing is in-line to undergo a serious change as a result of such ideas and the fabbing revolution.
This "new world" is far more dynamic, no-one can plan it in detail, no-one knows where it is heading, you have to simply "try, measure and adapt".
This "new world" is being driven by the idea of open source, the impact this idea is having in many industries and the consequential increase in the rate of innovation.
It's more than just another licensing model and there is no turning back.
The horse, in my opinion, has well and truly bolted.