Open source software seems to be in competition with commercial software today. But I think that there will be a symbiotic relationship between the two in a few years.
I believe open source will become a follow-up to commercial offerings. Companies will come out with innovative software packages that we will all buy. Then, as the commercial packages become stable and somewhat stale, the open source community will come out with a similar open source offering comparable to the commercial package. Then we'll all switch to the open source system, and the commercial software vendor will have to come up with something new to entice us to buy again.
On the other hand, the open source community is so full of innovation, they are likely soon to overtake the commercial world in innovative offerings. Right now, most work done in open source is mimicking the commercial systems. OpenOffice mimicks Microsoft Office. Gimp mimicks Adobe Photoshop. Adium mimicks AOL Instant Messenger.
But I expect this innovative group of people around the world will soon surprise us with applications we've never seen before. Applications the commercial world can't even dream of.