What open source means
Open source software has its source code made publicly available under a licence that allows anyone to inspect it, modify it and distribute modified versions. This is distinct from proprietary software, where the source code is a trade secret and users receive only compiled binaries. The Open Source Initiative maintains a definition of open source and approves licences that meet it.
Why Linux matters
Linux is the most important piece of open source software ever created. Linus Torvalds released the first version in 1991; today, Linux underpins the vast majority of web servers, all major cloud computing providers run their infrastructure on Linux, Android (which runs on around 73% of smartphones) is built on the Linux kernel, and Linux powers everything from routers to supercomputers. Understanding why Linux succeeded — a community of contributors collaborating across organisations and countries, no single owner, a meritocratic contribution model — illuminates the dynamics of open source more broadly.
Why companies give code away
Large technology companies invest heavily in open source, which seems paradoxical. The reasons: contributing to shared infrastructure means not having to maintain forks in isolation; open source projects attract talented engineers (who prefer working in public); open source components become de facto standards that their originators have influence over; and open source creates ecosystem effects that benefit the originators's commercial products.
The licence question
Open source licences vary significantly in their terms. "Copyleft" licences (like the GNU GPL) require that derivative works also be released under the same licence — meaning anyone who incorporates GPL code into their product must release their modifications as open source. "Permissive" licences (like MIT and Apache) allow incorporating code into proprietary products. Companies often prefer permissive licences for components they contribute to.