Software piracy eats up a lot of revenue of the big guys. One might think that since piracy is bad for software companies selling proprietary software, it is good for open source. It is surprising to see many open source followers correlate lower business or loss of software giants (due to piracy) with growth or victory of open source. I believe this is not true.
Take example of Microsoft Windows. Paying for windows is a new concept for many people in the place I come from. Undoubtedly, Windows is the best operating system to go for if you are a serious gamer, as almost all games that come for PC are targeted at Windows. If you do not have Windows, you are left out. At this point, there are two choices - either legally buy a copy of Windows, or use a pirated copy. If you buy, you have already fueled the proprietary engine.
Assuming you chose to use pirated copy instead, you essentially got it for free (in a free beer sense, even though you do not have the sources and consent that you can freely modify and redistribute). This is where comparison starts between pirated proprietary software and the open source alternative. Many times the open source alternatives are under-manned and under-funded, which means they lack some (probably game changing) features that are present only in the proprietary software. This makes the open source versions look inferior. The general public does not think twice; they can get both for same price - free! Obviously they would go for the better proprietary version. They do not realize that they are weighing watermelons (well funded, manned and planned proprietary software) against grapes(OSS), and the OSS alternative loses popularity. As OSS versions' popularity reduces, more and more people turn to the proprietary software, either buying it or using pirated copies - a vicious circle. As more and more people use Windows, more and more softwares (utilities, office software, games, multimedia etc.) are made available for windows (many times exclusively), which in turn attracts even more people towards Windows. If not a single person used pirated Windows, the number of installations of Windows would be _significantly_ lesser than it is now, which would force application developers to write software that also runs on other operating systems, which in turn will lead to more adaptation of non-Windows operating systems by people. It is essentially a balance, which miraculously tilts in favor of proprietary software when it is pirated. This is why some companies deliberately let people use pirated copies of their softwares long enough to set the `vendor lock-in'.
I believe this is true for any proprietary software and it's OSS alternatives. To break this cycle, next time someone asks you for a pirated copy of a software, hand him an (or a list of) OSS alternative, ask him to support the development team by providing money, manuals, free advertisement space, compute power etc.
When two or more OSS softwares doing similar things compete against each other, the price and piracy factors are missing from the equation, but everything else still holds - the better the software at solving users' problems, the more followers/popularity/user-base it will get. A purely merit based system/balance! We want people to fairly compare proprietary software and corresponding OSS on equal grounds, which means asking users to compare the copy of Windows they _bought_ for a couple hundred dollars, with Linux which is available for free.
I still do not know if the open source model is the best for our industry, but if you strongly believe in open source, please persuade people not to pirate.
