Open-source software is significant because it promotes collaboration and innovation. By allowing users to access, modify, and distribute source code, it fosters a community of developers that can collectively improve the software. This model often leads to faster problem-solving, increased security, and cost-effective solutions. The reliance on a community for support rather than a single vendor enhances software longevity and adaptability. Popular examples include Linux and Apache, which demonstrate that open-source projects can compete with proprietary alternatives on performance and functionality.