As it happens, I work a lot with companies pursuing open source strategies. I'll share with you what I always tell them -- open source is not magic; you need to create a useful product and build a vibrant community. To do that requires a lot of blocking and tackling -- distributing the product, participating in user forums, lots of evangelism at the local level, and so on.
It seems like the big competitors have all the advantages, but it's not really true. Open source lets a small company achieve distribution without massive marketing spend. Just look at SugarCRM as an example.
As a mild self-plug, Chapter 2 of my book, Succeeding with Open Source, discusses open source business models. You might find it helpful in focusing your efforts. Good luck.
This was first published in June 2005