Technology is a really interesting example of innovation which happens for its own sake.
Companies such as Microsoft operate within the traditional capitalist system. They create something, and then sell a license to use their product.
The actual product in reality simply is a specific series of 1s and 0s (as is any computer program, at its base). When Microsoft sells a program, it's selling a copy of a specific pattern of 1s and 0s.
They have been very successful doing this.
However there is debate within the developer community about whether you should be able to sell licences for programs at all. An increasing number of people believe that programs represent knowledge, rather than a product, and that knowledge is something which should be shared not sold.
Developers who believe this build and license software as "open source software". Open Source software is built collaboratively, by people dedicating their time and skills to the project for free. At first the business community were suspicious of Open Source software because of worries about things like quality control, and often ugly or difficult to use user-interfaces (the bits which you see as a user). However as the Open Source community has matured and developed, it's is becoming much more widely accepted by mainstream companies, many of which are now contributing to Open Source projects themselves as a matter of course.
You will have used open source products. Many websites (probably this one) live on servers powered by open source software. Android, Wikipedia, Firefox and WordPress are all Open Source for example, and were created and given away for free.
If you're interested in this sort of thing, have a read of this short essay by Sci-Fi write neal Stephenson, which describes Open Source better than I can!