How do software companies make money

How do free software companies make money?

How do companies that offer free software (as in beer) make money? I'm thinking of things like Linux distros as some even offer free overseas shipping!


Red Hat is worth more than a billion dollars these days. Yes, they make money. Through advice, support, training, etc.

That said, there isn't a lot of open source companies that actually do that do Money. Canonical certainly not (yet). Novell is in bad weather. Mandriva is always in bad weather. Zarafa is relatively new and small.

On the other hand, ask yourself if there has to be a single company that offers something. Companies such as IBM, Oracle, Red Hat, Novell, Intel, AMD, Fujitsu, Dell, HP, QLogic and lots others work together on the kernel. They don't all make money just "selling" or supporting this kernel, but they fucking make money.

The difference between (companies like) Microsoft and (companies like) Novell or Red Hat is that the latter can value a commodity, while (companies like) Microsoft can only make money by making sure that what they sell never becomes a commodity. That's why Microsoft is fucking afraid of open standards. Same goes for Apple. Open standards aren't cool if your company is supposed to attract people to your product. Open standards are very cool when you can provide something (support, advice) in addition to an open, standardized goods platform.

So it works :)

In short, distributions like Ubuntu make money by providing companies with 24/7 support packages.

Now the money that is normally spent on software can be used for the man who keeps the software running ... which in this case is Canonical ...

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