Free alternative to Basecamp. Is there a flaw in 37 Signals business model?

Here's an alternative to 37 Signals popular Basecamp project managing software: ActiveCollab (Absolutly terrible name.) TechCrunch article link.

 A flaw in the newfound "simple" business model? Seems when somethings so simple it's easy enough to knock off. And since there are any number of programmers ready to provide a free service, where are the barriers to imitation?

Comments

[Ronaldo]

Except ActiveCollab is about to be transformed into a commercial product - so even open source crusaders can be easily monetised!

[nes]

I just found a new site that just launched for project/task management, its called santexq, so take a look at it, it works for me.

[Sam]

Here is to a better alternative. I mean way better http://santexq.com/
We started using the Q since a few months now and these guys are killing it.
They are releasing new features all the time and yet the best thing, it is free!