Ah yes ESRI, thanks for shedding some light on the options available for GIS.
This is a terrific example of how open source goes further than blog software and free desktop applications. Companies spend millions each year on enterprise databases financial systems, billing systems , student registration hospital information systems. On the software licenses, training, expensive consultants and upgrades.
When we have viable open source offerings in these areas, organizations can choose an open source solution instead. They will be able to choose who they want to be their helpers. They can share best practices and everyone can benefit as these ideas are incorporated into the software.
These Grand Scale open source projects wont appear on their own. They need to be championed and invested in by the stakeholders. We are not there yet, but in a few years "sustainable software" will be in vogue.
Since my friend's last message, he has located the use of Open Source GIS at NYU http://www.nyu.edu/its/gis/os/. It looks like it is becoming a more viable option and the landscape will change somewhat in the coming years as you have pointed out. Perhaps exciting times/developments ahead...