Open source is not well understood as a business model and is mistakenly thought by some not to have a business model.

However it does have one. Roughly speaking it is this: a number of individuals, usually from different organisations, choose to collaborate on building software and agree to share the fruits of their labour with each other. Thus they are the developers and they also represent eventual users.

The application they build may have no compelling use outside those immediately involved in the project.

Even if it does, none of the individuals involved wants to go into business and market the software, and none of the organisations involved wishes to prevent further sharing of the software. So they make it available for free with source code, to anyone else who may be able to use it.

Such collaboration predates the founding of the open source movement, having been the basis of a fair amount of shareware in the 1980s.

The open source movement enhanced the model by formalising the arrangement in a legal agreement (the famed General Public Licence) obliging all further users of the source code to share the fruits of their additional work and preventing commercial exploitation of the source code.

There is an ongoing cost in the enhancement and support of the software, but it is low and the benefit is less expensive software.

This arrangement has given birth to a number of industrial strength software products of which Linux and Apache are merely the most prominent. These and quite a few other products are used successfully by organisations of every kind from small companies to large multinationals and government departments.

We should particularly expect government to be enthusiastic about such products and about the whole concept of open source. Here is why:

However, at the moment few governments support the open source idea in any official way.

The UK government is a good case in point here. It is an occasional user of Linux, for example. An expert at the government's Communications Electronics Security Group even endorsed Linux as the most secure computer architecture available of its type.

The use of Linux on PCs is now a very compelling prospect, as the required components from user interface through office software and email have come to maturity and many of the products are very similar to Microsoft's Office products in look and feel.

The potential cost savings here are high, because the software licence costs on PCs are high. Estimates of actual savings from those who have made the switch vary from £200 to £650 per PC, but much of this depends on how PCs are used.

If we take the lower figure of £200 and assume that of the two million people that work in central and local government in the UK only 40 per cent are PC users, that still suggests a saving of £160m.

Also, this is not a one-time saving but an ongoing saving for every upgrade cycle. Government procurement of just about everything is controlled by a set of rules that obliges it to pay attention to value for money, so it is difficult to understand why the UK and other European governments are not awash with open source products.

However, that is not the major point. If we look beyond the government use of technology towards corporate and consumer use, then we are looking at a much larger population of PCs, probably in the area of 50 million.

If open source took hold in this area, then the potential savings head towards the region of £1bn. If government provided the lead then the rest of the economy might follow.

Government action of this kind is not unprecedented. The Chinese government directly supports Red Flag Linux, a Chinese version of Linux. P>Other less wealthy economies including India, many parts of central and South America and eastern Europe are all seeing a rise in the use of Linux simply for cost reasons.

So, in the long term, it may be necessary for the UK to adopt open source more enthusiastically for the sake of its own technology sector.

In the end it is simply a matter of competitive pressure. Open source currently offers a very compelling value proposition and it has long passed the point where there could be any doubt about the quality of its product.

The political wing of the open source movement might be well advised to lobby government to adopt a positive attitude to Linux. It would do much more to advance its cause.