Open source software is absolutely not irrelevant in smaller IT shops. It might actually be more relevant since small companies' budgets and IT staffs are not as large as those of bigger businesses.
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Just because open source ships with code, it doesn't mean you ever even have to look at the code. Ask the vast majority of Linux users if they have ever looked at the source code for the Linux kernel, and I don't think you'll get very many affirmative answers. They'll just say that Linux works great! You should use open source software wherever it makes business sense to do so.
If you are paying X amount of dollars to run Web servers on HP-UX servers, or Windows IIS on 2003, it would behoove you to look into using Apache and Linux as a coordinated solution. Not only will you find that it will cost you less, but after you get through some initial training, you'll find it a lot easier to support then Windows or Unix. When you finish porting your Web servers to Linux, then you can start looking at your database servers. Oracle uses only Linux servers at their corporate office, so that should tell you something.
You might also want to look at open source ERP (enterprise resource planning) solutions. Can your small company justify bringing in PeopleSoft? Maybe not, but you can download a free open source ERP product, such as the Compiere product.
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