Is non-FLOSS really long-term viable?

I was recently invited to join a Facebook group titled Is Information Systems using Open Source Software (FLOSS) really viable?. I wrote the following comment on the Wall of that group.

Not sure I can really contribute to this "debate". I started in Free Software at an early age, and in fact don't see how non-FLOSS is really long-term viable.

We can't just focus on financial costs, but other cost such as copyright infringement enforcement where FLOSS only has to deal with a tiny number of commercial infringeres where non-FLOSS is trying to monitor and monetize the private activities of the worlds population.

Before I really understood software freedom, it was the futility of enforcing software copyright in a proprietary business model that drew me into Free Software. More than a decade ago I came to believe that the best way to solve the so-called "Software Theft" problem that the BSA claims to be so worried about is to switch to methods of software production, distribution and funding that didn't rely on royalties or monitoring the private activities of the worlds citizens (most of which can never afford proprietary royalty rates anyway).

To this I might add that the market for the enterprise which has large IT support which can count copies and manage contracts with vendors is very different than the SME and home markets. While I believe that non-FLOSS could be viable in the enterprise, that increased availability of IT into small organizations and homes will mean that business models that rely on counting copies won't work in SME and home.

It is interesting, however, to note that the enterprise operations which want to take more control over both the features and costs of software are often the early adopters of FLOSS methods for tools which are used on most desktops. This puts into question where non-FLOSS has any long-term viability for commodity items such as operating systems, network tools (browsers, email, etc) or productivity tools (word processing, spreadsheets, etc).

This leads me to believe that non-FLOSS will be pushed to niche markets involving specialized tools in the enterprise space.