Open-source Software's Effect on Innovation
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Open source software can be very beneficial to innovators, because it provides building blocks for new software projects. Open source projects are able to build upon each other to more quickly deploy new software.
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Open Source Software Runs the Web
Most of the web runs on open source software (Netcraft October 2009 Web Server Survey). Since shortly after its release, Apache (an open source webserver project) has been the dominant web-server on the Internet. A large number of open and closed source web applications have been designed to utilize the LAMP software stack (Linux/Apache/MySQL/PHP) or variations using similar open source software. These softwares depend on the underlying open source technologies, and likely would have never come to be if the open source software stack they run on did not exist.
A very notable innovation built on open source software is the Google search engine (among many other Google products). Google combines "450,000 low cost commodity servers" (Google Architecture) into a series of clusters to provide the best search engine on the Internet. These "clusters" can interact and combine resources because they use a customized version of the open source Linux operating system. Google was able to start with a very flexible operating system and modify it for their needs, because it was licensed as open source.
Research Applications
Open source software allows researches to combine and utilize existing technology to achieve their research. Typically a researcher wants to complete their research with low overhead. Open source software can be used to quickly implement customized systems capable of supporting research, without spending the time and money to develop fully custom solutions.
For example, WSU researchers in the school of Electrical Engineering and Computer Science are utilizing a mix of open source software to gather data for the CASAS Smart Home project. The CASAS project uses a variety of sensors in living areas. These sensors feed data to an in-home Linux server, which publishes the data to a master server with the open source Jabber protocol. The master server stores this data in an open source MySQL database for later analysis (Collecting and disseminating smart home sensor data in the CASAS project). Developing all of this technology from scratch would likely have delayed the project by years, or made it completely infeasible. Open source software allowed researches to quickly build a messaging and storage system for their data so they could the focus more time on analysis.