This is a great question. I've asked myself as much and I think it comes up any time someone decides to sit down and write an app. To me, the short answer is

This is a great question. I've asked myself as much and I think it comes up any time someone decides to sit down and write an app. To me, the short answer is that pople can be enticed to pay for webapps when the app delivers value and solves a problem. Open source tools all too often solve a problem, but do so in a way that fails to deliver value. For certain customers, there's a difference between " I can do this myself " and "It's worth it for me to do this myself". Open source solutions usually fall into the first category. Paid apps allow customers to answer no to the second question. I went into a bit more detail on my blog at http://nathanroach.posterous.com http://nathanroach.posterous.com.