The essay contrasts two different free software development models:
The Cathedral model, in which source code is available with each software release, but code developed between releases is restricted to an exclusive group of developers. GNU Emacs and GCC are presented as examples.
The Bazaar model, in which the code is developed over the Internet in view of the public. Raymond credits Linus Torvalds, leader of the Linux kernel project, as the inventor of this process. He also provides anecdotal accounts of his implementation of this model for the fetchmail project.
The essay's central thesis is Raymond's proposition that Given enough eyeballs, all bugss are shallow (which he terms Linus's law): if the source code is available for public testing, scrutiny, and experimentation, then bugs will be discovered at a rapid rate. In contrast, Raymond claims that an inordinate amount of time and energy must be spent hunting for bugs in the Cathedral model, since the code is available only to a few developers.
The essay helped convince most existing open source and free software projects to adopt Bazaar-style open development models, fully or partially — including GNU Emacs and GCC, the original Cathedral examples. Most famously, it also provided the final push for Netscape to open the source of Netscape Communicator and start the Mozilla project.
The Cathedral is also the typical development model for proprietary software — with the additional restriction in that case that source code is usually not provided even with releases — and a common usage of the phrase "the Cathedral and the Bazaar" is to contrast proprietary with open source. However, the original essay concerns itself only with free software, and does not address proprietary development in any way at all.