While open source is becoming a topic of mainstream business, the level of awareness and depth of understanding of the open source paradigm still varies considerably and represents a significant barrier to broader adoption. Open Source Software (OSS) usage rates in the public sector were above average, while in the business sector the smaller organisations stay behind in comparison to larger ones. Even though research and experiences shows there are advantages to the use of Open Source applications and solutions, take-up by SMEs is very slow. They face generic barriers to adoption including trust and transaction security and IPR concerns, and challenges in areas of management skills, technological capabilities, productivity and competitiveness. The issues related to OSS are broad and cover many areas (legal, technological, etc.). This paper addresses one aspect of OSS, i.e. the reasons why smaller (and to some extent medium) enterprises are reluctant to adopt Open Source solutions and applications, focussing on the barriers related to competencies, knowledge and management skills.