SCO's open letter to the Open Source community is interesting. There's a lot of misdirection, and some comments about "business models" I really disagree with. I tried to post feedback, but alas, the web site failed badly to work. My rant here... (update: it did get posted after all)
Disregarding most of this, and skipping close the the bottom...
With respect to the "business model" surrounding Open Source, McBride is clearly wrong on this issue. People such as IBM include Open Source because it saves them having to develop that aspect of their product. Using Apache (for example) means you can save writing a web server and get on with botching an application server ;-)
IBM (and others) support the use of an embedded Apache. If it breaks, you tell them, they'll work with you to solve your issue.
Numerous other companies do this as well. Google, for example, use a Linux based machine for their search box. They support the full service that box delivers - if it fails to index and search, they fix it.
This is where the business model of Open Source is. Any company, large or small, can create, operate and deliver a product that incorporates O/S elements. Indeed, companies exist purely to service this kind of business model (eg. Redhat).
Open Source simply forces (large) vendors (SCO included) to innovate. Since anyone (large or small) can now put together a system to deliver "killer application X", everyone is forced to compete with them. If you've got "slightly naff product Y", then you either need to raise your game, or otherwise get out.
Those people (eg. SCO, MS etc) that claim that Open Source stifles innovation are those that fear it because it forces them to modify their own business models. Those that embrace it will find they are more able to innovate at the "top end" of their product without having to constantly maintain more "standard" areas, such as web servers and command shells.
"Top end" innovation is a general raising of the bar with respect to technology. This is the beginnings of more complex features, all yet to be conceived. For a more simple example, a J2EE application server cannot exist without a web server. To conceive of a J2EE server, you have to also consider the web server. If the web server part is already done, you can get on with imagining and designing the clever and innovative J2EE bits of the product.
Clearly, as time goes on, all vendors will conceive of more and more innovative and clever products, built on the foundations of those that came before. Since Open Source moves relatively quickly, this should allow vendors to create new products, sell them, and then move on quickly also.
Open Source is far from the end of sustainable business models. Indeed, it is the start of a broader market place with more highly innovative products and competition based on more than hum-drum products.