So how do these companies make money off the product? AFAIK it’s a breach of the usage license of Linux to sell it (although I have no idea who’d sue you for it). I get the idea of competitive collaboration to improve a product, but if the product can’t be sold, why are these companies paying people to work on it?
They pay little of R & D costs, benefit fully from collaboration, and sell both the product and the services (especially the services) behind the product.
But, remember, these are not small start-ups. IBM has existed for 60 years or so, and Intel is the leader in the industry. They must derive some benefit to the bottom line or they wouldn’t be involved.
More knowledgeable FReepers, correct me if I'm wrong.
The Linux kernel is covered under the GNU GPL, which means that companies can sell modified copies of the kernel, but they must provide the source code, including modifications. And, after the first distribution, the recipient can then turn around and offer the entire thing for free to others. So, there's not really any money to be made in selling the product itself. As for breaches of the GPL, the original author (or copyright holder) would be the one to sue the infringer.
The money is in supporting businesses and developing custom software applications that may depend on the GNU/Linux system.
The right to sell copies is part of the definition of free software. Except in one special situation, there is no limit on what price you can charge. (The one exception is the required written offer to provide source code that must accompany binary-only release.)
Does the GPL allow me to sell copies of the program for money?
To be a tad too blunt about it, five or ten years ago I managed a group doing a piece of Unix kernel code critical to the specialized computer systems my employer sells. Now I do that myself as a Linux open source project cooperating with other people in other companies from around the globe (Australia, France, China, Japan, India, Eastern Europe, ...)
For a tenth the cost my employer is getting several times better technology, and our customers much prefer not being locked into proprietary solutions.
Who says it can't be sold? You're confusing Free (as in Beer) with Free (as in Speech)
If you take open sourced code that is released under the GNU Public License (GPL) and make modifications to it, you are fully free to charge whatever you want for it (as in Beer) The requirement imposed on you though is that the source code including your modification also be made available, under the GPL, for others to use as they wish (as in Speech). If you don't redistribute the software to others, you're under no obligation to release your modifications.
Why this is worth expending resources to companies is that it allows them to avoid re-inventing the wheel, or having to purchase expensive proprietary software when open-source software exists that does what they need with little or no modification.
Companies also can make money off open source software by releasing it packaged with proprietary "value-added" software that makes it worth the consumer's time to buy. ie. Installer programs, Office programs, Point of Sale software, etc.
And that's true for for all companies, including Microsoft. They don't make that much money selling SQL server. They make money from selling services to design SQL systems for large companies.
Mark