How would you answer the question, "How does Linux make money"?

[Learning Linux 2011]

I was talking to a guy about Linux and one of the first questions he asked was, "If it is free, how do they make money?".

How would you answer that question?

I know Canonical charges for support for instance, but that can't explain all of it.

[el_koraco]

they steal from grandmothers

[d3v1150m471c]

a lot of projects accept donations. I know Novelle and Canonical offer professional services for their distros which are paid for.

[XubuRoxMySox]

Support services (especially for servers and small business stuff) mostly. Red Hat and canonical both do lots of that. Sometimes Linux companies make deals with OEMs that help them reduce the cost of their products.

-Robin

[handy]

http://www.bloomberg.com/news/2011-03-24/red-hat-rises-as-revenue-earnings-beat-analysts-estimates-2-.html

http://forums.theregister.co.uk/forum/1/2011/03/29/red_hat_billions/

[disabledaccount]

Applications (tools) and services (web hosting, software support or administration, etc) - that's what can make money for You as the end user.

Generally linux does not make money, at least not for end user - just like windows or any other OS. Linux kernel is in fact "public property" - developed by many big companies like Intel, AMD, IBM, Google, Dell (f.e. DKMS) and thousands of individuals. If You mean making money directly from using linux kernel, then the only way is making embedded (specialized) systems - and this is very big market today, as Linux kernel is used for phones, "ipads", network switches, Wi-Fi APs/routers, SAT/VOD decoders, DVD players etc. But, You have to be really good to join this game :)

[handy]

Red Hat is the prime developer of Linux I believe.

Here is a somewhat aggressive though truthful little rant on the topic:

http://gregdekspeaks.wordpress.com/2010/07/29/red-hat-16-canonical-1/

This one doesn't have the emotion:

http://decisionstats.com/2010/09/14/linux-who-did-what-and-how-much/

[weasel fierce]

I hear Intel, IBM and HP sell some hardware on the side ;)

[disabledaccount]

Red Hat is the prime developer of Linux I believe.
When I say "linux" I mean linux kernel. GNOME is not Linux - it can work on windows as well :) Besides measuring code contribution value in % is ridiculous. DKMS is one of most important parts of linux kernel project - but I doubt that it takes more than 1% of kernel code.

[jimbobs]

I was talking to a guy about Linux and one of the first questions he asked was, "If it is free, how do they make money?".

How would you answer that question?

I know Canonical charges for support for instance, but that can't explain all of it.

The simple answer is that it only free to certain users. Commercial users pay for licences because they require stable products on which to base their services. Red Hat is a public company with annual revenues of $900m plus while Canonical is a private company with revenue said to be around $30m in 2009.

[HermanAB]

A simple answer is: "Government support contracts".

A longer answer: "Governments and large corporations all use Linux and someone has to set everything up and maintain it".

[thenickrulz]

they steal from grandmothers
lol

[handy]

When I say "linux" I mean linux kernel. GNOME is not Linux - it can work on windows as well :) Besides measuring code contribution value in % is ridiculous. DKMS is one of most important parts of linux kernel project - but I doubt that it takes more than 1% of kernel code.

Apparently Red Hat are by far the highest contributor to the Linux kernel, at around 16 ->17% of contributions. I think they also may top, gcc, GNOME, x.org, etc...

[earthpigg]

When I say "linux" I mean linux kernel. GNOME is not Linux - it can work on windows as well :) Besides measuring code contribution value in % is ridiculous. DKMS is one of most important parts of linux kernel project - but I doubt that it takes more than 1% of kernel code.

the post above this answered it.


I hear Intel, IBM and HP sell some hardware on the side ;)



If you want to make your hardware viable and flexible in the mainframe or supercomputer sector, there is only one route available: Contribute To The Kernel.

As it turns out, yesterdays mainframe is comparable to tomorrows desktop. Linux doesn't run well on quad-core Intel i7 CPUs entirely because "volunteer hobbyists" coded that stuff for fun, it also runs well on that hardware partially because that stuff is similar to the supercomputers of yesteryear sold by IBM, HP, etc, too.

[disabledaccount]

Apparently Red Hat are by far the highest contributor to the Linux kernel, at around 16 ->17% of contributions. I think they also may top, gcc, GNOME, x.org, etc...
I'm not saying that this is false, but rather that there is no defined way to compute those percents, so it sounds like 17% of <nobody knows exactly what>
Here is some interesting article:
http://lwn.net/Articles/222773/
This shows that RedHat is on 2nd position, just after <unknown> :)

edit:

the post above this answered it.
Linux doesn't run well on quad-core Intel i7 CPUs entirely because "volunteer hobbyists" coded that stuff for fun, it also runs well on that hardware partially because that stuff is similar to the supercomputers of yesteryear sold by IBM, HP, etc, too.
And what the hell You'are talking about? Linux works extremely well with i7 - what is this? - some kind of FUD?
http://www.phoronix.com/scan.php?page=article&item=intel_core_i7&num=3
/edit

[handy]

I'm not saying that this is false, but rather that there is no defined way to compute those percents, so it sounds like 17% of <nobody knows exactly what>
Here is some interesting article:
http://lwn.net/Articles/222773/
This shows that RedHat is on 2nd position, just after <unknown> :)

I've seen unknown here & there also at various times? That link is 2007 too.

[earthpigg]

And what the hell You'are talking about? Linux works extremely well with i7 - what is this? - some kind of FUD?
http://www.phoronix.com/scan.php?page=article&item=intel_core_i7&num=3
/edit

No, not at all. I have an i7 and I know that Linux works very well with it.

Please re-read my post. It is Intel's best interests for Linux to work well with their latest hardware, so they see to it that it does.

Not for the small percentage of us that use Linux on our home Intel desktop computers, but because there are bucket loads of cash to be made in servers (http://www.intel.com/products/server/#systems) and mainframes and the like.

You and I only benefit because our i7 desktops fortunately for us run identical or similar hardware to some of those servers and mainframes and the like, and because it takes very little additional work to turn code that makes Linux predict the weather or run the NYSE (http://www.informationweek.com/news/software/infrastructure/207800195) on Intel into code that makes Linux run Firefox and World of Goo on Intel.


So, regarding the OP's question:

One way that Linux "makes money" is by making hardware appealing to customers. Think of all those IBM, Intel, and HP employees that earn a living by coding for the kernel.

Also to the point of the OP's question: Define "Linux" and then rephrase your question (or ask your friend to). "Linux the kernel" makes $0, just as "beer in a beer can" makes $0. The beer can by itself just kind of sits there and exists. Ditto for the kernel.

Someone has to make it, sell it, market it, ship it, etc. Those people make some money, but no beer can or kernel magically generates revenue by itself.

Would you like to know how the Linux Trademark Institute makes its money?

Would you like to know how Linus makes his money?

Would you like to know how Red Hat makes its money?

Would you like to know how a tree makes money? (hint: someone must 'compile' it into paper first, and then perhaps attempt to differentiate their paper from everyone else's paper, or maybe put that paper in a pretty binder or include it with a printer the way HP includes Linux with its servers (http://h18000.www1.hp.com/products/servers/byos/linuxservers.html). That does not mean that a tree has no market value - ditto for our favorite kernel.)

[chessnerd]

In my experience open source projects make money in five different ways:

1. They take donations. A well known project that functions mainly on donations is the Gnome project.

2. They offer paid support for their products. Canonical and Red Hat both offer commercial support for their operating systems.

3. They sell other stuff through their software. An example would be Canonical's Ubuntu-One cloud storage and music store. Ubuntu One is included free with Ubuntu, but extra storage and music costs money.

4. They sell swag and goodies. Ubuntu, Mandriva, and other distros have stores where their users can buy t-shirts, embossed flash-drives, etc.

5. They actually sell their software. The GPL does not prevent people from selling software. Some Linux distros, like Mandriva, sell their software in a nice box package with an information pamphlet and everything that you'd expect buying an OS at a store. They sometimes include bonus proprietary software with this. The Canonical store also sells Ubuntu CDs.

These are the main ways that I've heard of.

Another option that some distros and projects take is that they just don't make money. Some projects are done simply because those involved like coding and/or want to produce something that people like. The Parcellite clipboard manager seems to be coded without any form of income. The website has no donate button, there is no store, or commercial support option. The website just has a download button.

[forrestcupp]

Big companies that rely on the benefits of Linux and some large software projects invest in these projects to ensure their continued development.

You can't expect to start some small open source project and expect to make a bunch of money from it, though. That's what commercial, proprietary licenses are for.

[earthpigg]

The Canonical store also sells Ubuntu CDs.


if I were going to be charging money for Ubuntu support, I would certainly be purchasing these CDs - if the dude is paying me $X to install, configure, and support Ubuntu... he's earned a very nice looking (http://shop.canonical.com/index.php?cPath=17) CD.