The paid/free argument isn't really a valid basis for business decisions. Developing software is extremely expensive, even using free software. However, there are numerous overriding benefits of open source software.
#1: Startup founders use technology they know. Open source developers tend to be willing to trade more risk and effort for a more tailored and flexible end product. This is a similar personality profile to someone who's willing to put in a large amount of work to build a business and potentially get nothing for it. Microsoft builds run-of-the-mill, sure-thing products that will at least do something well, and they'll support it for you. Commercial software dictates their software model: take few risks and sell to broadest audience.
#2: Interoperability. Microsoft software works outstandingly well with other Microsoft software. Open source software tends to be built on open standards, and, again, if you have the source, it's always possible to hack it together. The open nature means less business risk when making software decisions. The way out is of a situation where software won't do what you need it to do is to use the source, even if only as a temporary patch.
#3: Automation. While things are getting better, it's still much easier to automate most open source software, since these products usually either have a CLI, an API, or even in the worst case scenario: source code.
#4: Even with BizSpark, licensing has limits on your companies' use of technology. Simple example: Do we go with a bunch of small boxes or a few large boxes? Licensing concern may drive your team to fundamentally flawed architecture decisions.
Good point with #4. The last time I was involved in a Microsoft project the SQL Server licensing costs were more than $30k per box. $30k was not a big deal on that project but it would have worked a lot better if the data had been spread across a bunch of little servers instead of two big ones. $30k * 2 is not so much; $30k * 50 starts to add up.
Hilarious amount of hardware? How do you figure? If you put a Rails app next to a ASP.Net app that do the same thing I guarantee there's not a "hilarious" difference in the hardware needed to run them.
#1: Startup founders use technology they know. Open source developers tend to be willing to trade more risk and effort for a more tailored and flexible end product. This is a similar personality profile to someone who's willing to put in a large amount of work to build a business and potentially get nothing for it. Microsoft builds run-of-the-mill, sure-thing products that will at least do something well, and they'll support it for you. Commercial software dictates their software model: take few risks and sell to broadest audience.
#2: Interoperability. Microsoft software works outstandingly well with other Microsoft software. Open source software tends to be built on open standards, and, again, if you have the source, it's always possible to hack it together. The open nature means less business risk when making software decisions. The way out is of a situation where software won't do what you need it to do is to use the source, even if only as a temporary patch.
#3: Automation. While things are getting better, it's still much easier to automate most open source software, since these products usually either have a CLI, an API, or even in the worst case scenario: source code.
#4: Even with BizSpark, licensing has limits on your companies' use of technology. Simple example: Do we go with a bunch of small boxes or a few large boxes? Licensing concern may drive your team to fundamentally flawed architecture decisions.