A company called Niku previously sold a product called workbench that was a serious competitor to Microsoft's Project. How serious? It sold for $10,000 a seat according to this InformationWeek report.
Despite the price tag, it was not a major revenue contributor, so Niku decided to release most of the code to the community under a Mozilla license. The product contains a few licensed components from others that cannot be released, as well, they will not release the source for their scheduling algorithm - which they may patent. They will distribute the binary for that piece. You can find out more at the web site.
Steve Ballmer commented in his corporate email that "Microsoft needs to do a better job of convincing customers that the latest versions of its products are worth having" (clipped from cnet). OpenWorkbench for free, or Microsoft Project for US$600 - Microsoft has its work cut out for it!
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