how well does open source currently meet the needs of shareholders and ceo's?

You are phrasing the potential answer incorrectly. Don’t look for billionaires. The earliest valuable open source software has been core infrastructure software, such as the Gnu C compiler suite. The beneficiaries were:
a) The software developers who did not have to pay $500/person for a compiler suite,
b) The hardware sellers, who did not need to develop a custom compiler for their new chip
Another example is Sendmail/Postfix/et al. The beneficiaries are all the companies that use the Internet for email. The core DNS software is another example that benefits everyone.
Most of the easy examples of benefits are from what could be called a “pre-negotiated teaming agreement” among the software users to share development and support costs for software that they all want to use. Their benefit is that they pay only the software cost, not the extra billions needed to create those billionaires. The developers are usually just ordinary salaried employees of teaming companies.

I think it largely depends on who the target market is for the particular bit of software. Most of the major open source projects (things like sendmail, linux, apache, etc) were designed by geeks for geeks. They are highly configurable and very often extremely stable.
The closer you get to non-geeks though the harder it has been for open source software to match up primarily because of the extra amount of time that is required to make an application not just functional but also intuitive and accessible to people outside of the geekerati. Fortunately that is all changing now that a.) developer tools for environments like OS X make it much easier to develop beautiful applications, b.) designers are playing a more active role in open source projects.
Ultimately though there is something else at play here. The people who love Microsoft (or any large vendor for that matter) use the tools and rarely if ever exceed the limits of what the tool was designed for. When they do they tend to find workarounds and move on. People that dislike vendors like Microsoft often were initially users of the vendors’ tools and move past what the tool was designed for and realize that the tool makes it damn near impossible to do something beyond what it was designed for. Finally they go look for something else and sometimes they find it (and it may be open source) or they may end up building it themselves (if they are so inclined) and realize that it is somewhat useful and so they open source it (or release it as a product).
One point though – open source doesn’t necessary equate to “hacking together something in your garage”. There are many open source projects in the world that are well engineered, probably much more so than their vendor counterparts in at least a few cases. When you do everything in the open it becomes very easy to separate the good from the bad.

Apache – runs 2/3 of the world’s websites – along with mySQL/PHP. Heck – it runs Arrington’s place!
Are you implying that Microsoft runs large companies on its technology?
Who says Open Source has to be about billionaires? It’s more likely to be found in smaller companies. Microsoft’s target market.

Dennis, is the context of your question whether Microsoft’s web technologies run in large companies or just MS technologies in general?
Funny, perception is sometimes that MS targets smaller companies, but really, target market is “scale”. Definitely in Large Enterprise and Fortune X00. Want some data on that?

Hello there. I’m a software developer who really digs open source software, and your question has left me thinking… And while I can’t offer an answer or some useful insight now, I can point you to this blog post I have stumbled upon just now, titled 10 reasons for enterprises to use opensource. It doesn’t answer the question, but at least might be an interesting reading.
p.d.: besides being a developer, I am also a big fan of gapingvoid.com. your posts are always interesting and the cartoons are just freaking cool. keep up the good work!

Kris – Hugh wan’t asking about that kind of data point.
But I should have been clearer. Depending on how you define what technology runs a business (applications/DB), scale (I think complexity + numbers) and which geography you’re in (US, EU. Asia-Pac, BRIC etc) then M$ is a no. 4 player – depending again on which numbers you choose to measure by.
Hugh didn’t say web though I mentioned certain technologies and that’s certainly where the action is right now.

I’ve been a fan of Hugh’s work for quite some time. But when I listen carefully lately, I can hear the sound of Gapingvoid jumping over a very large Redmond shark, with a Koolaide chaser. It’s very intoxicating to think one might get a piece of MSFT action, because the action is very large, and even a small fraction of it could make you a Paul Allen or a Charles Simonyi. Heady stuff, indeed.
There was some discussion earlier about being a “Microsoft partner”. Based on over 30 years in the computing business, I can tell you what “partner” really means in Microsoftian. It’s a synonym for “food”.

ehhh, being a Microsoft Partner myself, I can safely say I’m not treated as food. Whenever I have questions, it’s only a phone call or e-mail away and I get the information I need to make an informed decision. Employees, like Steve Clayton, are going out of their way to make personal connections, leading me to believe there’s a growing air of change in the way Microsoft will be conducting it’s affairs (at least in regards to their Partners).
I can guarantee you that I have gotten more from Microsoft than they have asked of me. Microsoft has gotten $300 of my earnings so far, which went to the purchase of an Action Pack, worth considerably more than $300. I’ve gotten hours upon hours of free training, virtual servers/desktops online for hands on training, etc. which allowed me to pass the 70-282 Exam to qualify as a Small Business Specialist. That alone has netted me several clients that were in negotiations with other service consultants.
They may have had that mentality awhile ago, I can’t say, but the picture you paint is definitely different than how they treat their Partners now.(at least in my experiences) If I sign up for a webinar, I get a phone call a week before, and the day before the webinar to remind me. This is something I don’t pay them a dime for, and they still take the time to give me a friendly reminder. That shows concern for the partnership imho.

Hugh, I have to agree with you, you don’t know much about software.
Are you aware that your GapingVoid blog is driven by PHP (an open source pre-hypertext parsing language) and MySQL (another open source project, database system)?
It’s okay if you don’t know the ins and outs of software, you have a lot of company, as many of CEO’s and Shareholders know little about software either.
Hugh, did you install Moveabletype (the software that drives the Gapingvoid blog) yourself? Or did you have someone do it for you? I suspect you had people for that. Most CEO’s and Corporations have people for that too, they are called geeks or IT departments. They invest or pay people to do the geek thing for them so they don’t HAVE to learn much about software. They can stick to more lofty things like production, marketing, accounting, P&L, competing for and developing their business.
There are two ways to invest in technology to leverage your business:
1) you can license the use of proprietary software and invest time (and sometimes money) learning how to use it.
2) you can download, install, configure opensource software and invest time (and sometimes money) learning how to use it.
The big difference is: when your business or business model does not fit into the pretty little boxes software designers of proprietary software, you and your business are held captive to the systems provided to you, and you may wait for change or your software provider to adapt to your needs (if that ever happens). With opensource software, I can hire geeks to CHANGE sourcecode, or expand curent software functions to fit my business’ needs. When I have a need, I am free to change or modify the systems my business is based upon. I can’t do that with Microsoft CRM, Word, Excel, or Vista. I’m sorry Microsoft, I prefer to move my business at the speed of my needs, not yours, and as such, your systems will not restrain or restrict my companies’ progress (and ultimately my bottom line).
Hugh, the question you need to answer is:
Does software drive business development, or does need drive software development?

How well does provoking two opposing interest groups promote a conversation across the blogosphere?

“If Open Source software is free, then why bother spending money on Microsoft Partner stuff?”
Simple. The cost of the software license isn’t the end of the story.
Let’s take two sets of people out of the picture. The feeble IT manager who thinks “No one gets fired from buying from the big player”. And the “Anyone but Microsoft” Biggot. Neither actually makes a decision.
If you’re talking about the comparison of two sets of desktop software how much more can people do with X Vs Y ? In business, over the 3 year life most people work, someone has to be less than 1% more productive to pay for cost of the Microsoft software. (If you’re a lawyer billing at £200 per hour it’s a LOT less than 1%). In the home Apple sell at a premium because – they argue – they can do things better / more nicely. You could ask Apple customers why they pay more than Windows ones – their answer would be “because it’s worth it”. If you ask Windows customers “Why not linux” – the answer is basically the saving isn’t worth it.
For deployment, infrastucture and servers you look at support, solution availabilty (partners etc) ease (cost) of maintaining it and the people who do go with Microsoft conclude that overall story is better with Microsoft. And the people who don’t figure the story is better with Linux, Old-school Unix, or (yikes) mainframes.

@ O’Neill
I’ve heard how MS used to be, I don’t doubt that at all. I know that in today’s Microsoft, as far as the small business is concerned, they make me feel like I’m a valued member.
It’s the little things, like the phone calls regarding training or the newsletters of partner only promotions, or giveaways for being part of the first 100 to act on filling out feedback forms on how Microsoft is meeting the needs of the Small Business. Requests for feedback is a major indication they are working on changing their ways and it’s a good feeling they are asking “me” how I view them.
I got a phone call at 8am on Friday by an honest to god live person informing me of a new product that was being released for testing and wanted to know if I’d be interested in having a CD shipped to my house. Things like that make you feel valued.
Anyway, I think I’m off-topic here (don’t shoot me!) so I’ll close this with Microsoft is doing a great job in involving it’s Partners.
As for the OS thing, I’m too set in my ways at my age to want to fool with Linux, etc. I played with it several years back and just found it to be too much hassle to be worth the little bit of cash I was saving. That extra expense was well worth the full head of hair I still have on my head. The clients I serve are end-users and small businesses that don’t need specialized applications, so I’ll be sticking with Microsoft for filling their needs as I’m very comfortable with the products and can serve their needs better and faster. If I come across a client that needs something special that MS can’t provide, I’ll pass them on to my good friend who specializes in Open Source solutions. He does the same for me, so it’s a good synergy.