The open-source-definition-schism of February 1998 is the formal hinge point of this era, but the pressures that produced it had been building for years. Netscape's announcement that it would release the Navigator source code provided the occasion: a group of hackers and entrepreneurs meeting in Palo Alto — including eric-raymond, bruce-perens, and Christine Peterson — decided that "free software" was a marketing liability. The term was confusing (free as in beer vs. free as in speech), it sounded anti-commercial, and it carried the philosophical baggage of stallman's specific ethical framework. Christine Peterson coined "open source" as the replacement, and the open-source-initiative was founded to promote it.
stallman's response was immediate and remained consistent for decades: "open source" describes a development methodology (making source code available) and deliberately strips away the ethical argument. The philosophical difference is precise: Stallman's position, elaborated in why-open-source-misses-the-point, is that software freedom is an ethical imperative — a matter of users' rights — while the open source position is that open development produces better, more reliable software. Both positions can endorse the same licenses, but they endorse them for different reasons and will diverge whenever ethical considerations conflict with practical ones.
eric-raymond's cathedral-and-bazaar-raymond, first presented as a paper in 1997 and published as a book in 1999, became the manifesto of the open source position. Raymond's argument was developmental and economic: decentralized, internet-enabled open development outcompetes hierarchical closed development. The essay was influential in convincing Netscape to open its source code. Raymond also represented a different political philosophy than Stallman — libertarian and skeptical of collective action — which sharpened the ideological divide.
Corporate adoption of open source accelerated throughout this period. IBM, Sun, Red Hat, and eventually Google built significant businesses on open source foundations. The commercial success validated the open source movement's pragmatic claims but also concerned stallman: companies that adopted open source licenses were not necessarily committed to the principles those licenses were designed to protect. Proprietary add-ons, open core models, and non-copyleft licensing all represented strategies for extracting commercial value from open source while limiting the freedoms it provided.
The free-software-foundation continued to insist on the distinction. stallman's free-software-free-society collection (2002) gathered essays making the ethical case. The FSF under Stallman's leadership refused to participate in open source industry events as "free software" organizations and maintained a consistent terminological practice — always "free software" or "GNU/Linux," never "open source" or just "Linux."
By 2006, the tensions had produced the need for a new GPL version. The gplv3-and-later-career-2006-present era begins with the public drafting process that addressed the vulnerabilities the previous decade had revealed.