Free and open-source software (FOSS) is computer software that can be classified as both free software (“free” means freedom) and open-source software. That is, anyone is freely licensed to use, copy, study, and change the software in any way, and the source code is openly shared so that people are encouraged to voluntarily improve the design of the software. This is in contrast to proprietary software, where the software is under restrictive copyright and the source code is usually hidden from the users.
The benefits of using FOSS can include decreasing software costs, increasing security and stability (especially in regard to malware), protecting privacy, and giving users more control over their own hardware. Free, open-source operating systems such as Linux and descendents of BSD are widely utilized today, powering millions of servers, desktops, smartphones (e.g. Android), and other devices. Free software licenses and open-source licenses are used by many software packages.
More on Wikipedia: http://en.wikipedia.org/wiki/Free_and_open-source_software