Hypothetically, say an organization is looking for bug tracking and project management software that is cloud hosted.
This is for 200 users and it needs 24/7 support. The budget is $30k/y.
Ahh, you could spin up Redmine on AWS for much less...
Maybe, but I'm going to need to hire a Redmine consultant to help configure it for our needs, add maintaining and updates for that instance to the sysadmin and add it to the helpdesk support - and if we really want 24/7 support, our helpdesk is only 7-5 business hours (the support is for the 'it crashed' which means that the sysadmin gets it on pager duty... but if there's an issue that's application support, so wake up an application team person who isn't on pager duty...). And there's a bug in Redmine, so either get a developer to learn Ruby (this is a Java shop) or beg the core team to fix it...
You know, Jira is looking more attractive as these likely costs start adding up - and it's a fixed price... not going to have an AWSh.. surprise if a bitcoin miner exploits an issue on the base image that didn't get updated.
Local and state governments do look at open source first. The "no cost to start" is very attractive until they get to a "this is a hard problem, you're on your own" and the costs go way past what a commercial application costs.
For government, a predictable budget so that you can ask for next year is valuable. Unknown budgetary costs are were overruns happen. A budget line item of $26,500 per year is much better than a budget line of "$0 to $50,000."