In production and development, open source is a philosophy, or pragmatic methodology that promotes free redistribution and access to an end product's design and implementation details. Before the phrase open source became widely adopted, developers and producers used a variety of phrases to describe the concept; open source gained hold with the rise of the Internet, and the attendant need for massive retooling of the computing source code.[citation needed] Opening the source code enabled a self-enhancing diversity of production models, communication paths, and interactive communities. The open-source software movement was born to describe the environment that the new copyright, licensing, domain, and consumer issues created.[citation needed] The open-source model includes the concept of concurrent yet different agendas and differing approaches in production, in contrast with more centralized models of development such as those typically used in commercial software companies. A main principle and practice of open-source software development is peer production by bartering and collaboration, with the end-product, source-material, "blueprints", and documentation available at no cost to the public. This is increasingly being applied in other fields of endeavor, such as biotechnology.

The sharing of source code on the Internet began when the Internet was relatively primitive, with software distributed via UUCP, Usenet, and irc, and gopher. Linux, for example, was first widely distributed by posts to comp.os.linux on the Usenet, which is also where its development was discussed. Linux became the archetype for organized software development orientated around the sharing of source code. The label “open source” was adopted by a group of people in the free software movement at a strategy session held at Palo Alto, California, in reaction to Netscape's January 1998 announcement of a source code release for Navigator. The group of individuals at the session included Christine Peterson who suggested “open source”, Todd Anderson, Larry Augustin, Jon Hall, Sam Ockman, Michael Tiemann and Eric S. Raymond. Over the next week, Raymond and others worked on spreading the word. Linus Torvalds gave an all-important sanction the following day. Phil Hughes offered a pulpit in Linux Journal. Richard Stallman, pioneer of the free software movement, flirted with adopting the term, but changed his mind. Those people who adopted the term used the opportunity before the release of Navigator's source code to free themselves of the ideological and confrontational connotations of the term "free software". Netscape released its source code under the Netscape Public License and later under the Mozilla Public License.