What is "Cost"
When we use software - "What is the real cost?"
The most significant "Real Cost" is the personal time and energy spent learning the software and figuring how to implement and deploy it.
With the "Closed Model" you pay for the software up front. After that - you bear your Real Cost - and hope that the software you paid for does everything you need in a way that you like.
With the "Open Model" - you get to make a more judicious and affordable decision - You use the software some and figure out if it does what you need. If it does not, and your needs are important, many Open Developers will put your unsatisfied needs into their "Change/Update List".
Net result - by the time you shell out money for software or support - you are in a much more confident state of mind about spending the money.
Talking of the costs associated with Advertising & Marketing. With the Open Approach - the developer restricts these costs.
Therefore - he/she does not have to load those costs on what you finally pay.
Because of these fundamental differences - I think that Open Source will gain dominance when money is being spent on "Government or Public Projects". With Open Source becoming better known, public watchdogs and audit functionaries are learning new metrics for software and systems costs.
Here are some major costs avoided or minimised by the Open Model: -
(1) Advertising and Marketing
(2) Legal fees for developing & maintaining licensing agreements.
(3) Shrink-wrap box production and logistics - most Open Source is downloadable.
In essence - Open Source - puts a larger percentage of the developer's real dollars into the real work of software development and enhancement.