two principle ways in which people make money with free software development modern economic models around fs development closely resemble early models keep in mind that software freedom is as old as software "proprietarization" of software began in the 1970s apparently pioneered by IBM furthered by companies like "Micro-Soft" and Bill Gates who in 1976 published his Open Letter to Hobbyists software was usually, if not always, distributed with source code usually either at no cost or at the cost of making and shipping copies programmers were paid for the time they spent working on software not for the software itself we see the same thing today programmers are paid to work on software the software is distributed freely (w/o restrictions) often even gratis example: Linux powerful and stable high-performance kernel found in everything from TVs and phones to supercomputers as of 2010, >70% of work done on Linux is done by paid programmers at least 659 companies have supported development of Linux compare that to development of MS Windows, supported by one company AMD's recent hirings show that if you can improve a company's sw, they might hire you example: Qt flexible cross-platform application framework popular in desktop & embedded applications most developers are employed by Nokia example: GNAT Ada compiler, now part of GNU Compiler Collection developed by New York University under $3M contract from USAF in 1992 (C) assigned to FSF and sw released under GPL why do companies pay for the development of sw that few people pay for? they have a financial interest in high-quality software many companies offer paid support for the software -- more later many sell hardware on which the software is run servers, wireless network adapters, cameras, TVs, phones, cars many see fs as a way to save money and avoid reinventing the wheel e.g. AMD and Coreboot (or so I suspect) AMD no longer has to pay for the custom development of BIOSes they use an existing fs solution, adapt it to work with their hw also, most software is custom software, which is technically free companies/people pay programmers to write software this software isn't released publicly but if there's 1 user, and that user has the rights, the sw is free free in a trivial sense support with proprietary sw, only the copyright holder is allowed to understand sw only they can support it the support is a monopoly with fs, everyone is allowed to understand it and support it support is a free market individuals make money making changes to fs programs either supporting their own programs of any other fs programs again, paid to work, not paid for the work individuals & companies sell consulting services & support contracts for fs Cygnus, Red Hat (announced income last year of almost $1B), Canonical Nokia/Digia and Qt Partners AdaCore as Mark pointed out, also Sencha Debian has a list of 824 consultants in 63 countries FSF lists 86 individuals and companies offering services in fs additionally, some people sell free software they can charge a fee for distribution, even of someone else's work it may go against the traditional fs development economic model but it's not inherently unethical or even illegal in the 1980s, RMS himself sold copies of GNU Emacs made about $1300/mo