The debate about open source software versus licensed software is so old that I don't think I can bring something new and relevant to that. It has been said almost anything that could be said and both side has it's "fanatics" that are sure that their way is the best way to do.
The open source software is a com puter software that is available in compiled form (when necessary) and in source code form, some copyrights reserved for the creators of the code are provided under a software licence that permits users to study, change, improve and sometimes to distribute the software. Some open source licence are gathered under the Open Source Definition and others are available within the public domain.
All the rights to a software code is reserved to their creators, that rights are changed when the owner gives them up (open source code) or sell the code (based on a legal contract to create custom software or just to buy an already existing piece of software). A licence is a legal instrument governing the usage or redistribution of the software, a typical licence grants an end-user permission to use one or more copies of the software in ways where such a use would otherwise constitute copyright infringements.
As a software engineer, a webdesigner and an end-user I had to deal with open source and licensed software as well. Usually I rely a lot on the open source software (Linux distributions, Open Office and others, including several tools to get work done), but there are moments when I pay gladly for the licences (I still need a copy of Windows to test stuff, there also are a lot of software that deserve their money several times over).
From my personal point of view, the best part of these two distinct ways to deal with the software code is that you can start a project from scratch (and get your money when delivering to the customer), but also you always can get the open sources and start customizing them to fit the requirements (it's faster, but you are selling a service, not the code itselft and there are not so many financial benefits from that in a single project). Either way, the client gets what she/he wants and everybody is happy (or they try to be). That's why I say that the licence software as we know it is slowly dying, nobody will be interested to buy something that does not have attached a period of support and maintenance or even improvements (as a clause in the development contract). This might stop the opposition to the open source software as they (the open source and the licence software) will emerge into services, not just some delivered code.