First, the main reason open-source applications might take precedence over a commercial product is because open source is free. In addition to this benefit, the source code is also open to the public and can be customized for each particular educational organization. For those who understand how to understand the language of code, this is the way to go. On the other hand, making changes is complicated and there is not a support system in place so at this point money might have to be spent for a support service.
The commercial applications usually come with organized instructions for users, a technical support staff and help line. Some are really expensive, depending on the program and the amount of users, but I believe those that are affordable are still better than the open source. I have not had the best of luck with the open source - at one point we had no funding so we had to use Open Office. So many students dropped work and reports because it was not compatible with open office. I have also had some experience with Moodle and found it to be OK, with very limited interaction and it was almost too structured for the things I wanted to work with.
If funds are not availalbe, open source is best as long as there is someone to offer support services, and if there are funds, Blackboard is one of my favorite, but there are so many options. There is also the option of applying for grants for these services.
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