In the context of software, 'open-source' refers to software whose source code is publicly available for use, modification, and distribution. This model encourages collaboration and innovation within the developer community, allowing anyone to contribute to improvements or adaptations. Open-source software often results in more transparent, secure solutions and can significantly lower costs for organizations as they can leverage community support instead of purchasing proprietary software licenses. Examples include the Linux operating system and the Apache web server, which showcase the benefits of open-source collaboration.