There is a common misconception that there is no money in open source software. It is true that open source code is free to download. But when it comes to making money you should think of this as an opportunity rather than a limitation.
Businesses who make money in open source software include:
MySQL (now owned by Oracle): Popular relational database.
Red Hat: Major distributor of Linux for server and desktop use.
WordPress: Widely used blogging platform.
SugarCRM: Business customer relations management.
Magento: E-commerce shopping platform.
Zimbra: E-mail and messaging server.
Whether you are the creator of an open source project or an expert in one, here are five ways you can make money with open source software. Note that each of these ideas presumes that the open source project is using an open source license which permits the activity described.
1. Sell Support Contracts
A sophisticated open source application like Zimbra may be free to download and install, but it is a complex piece of software. Setting it up requires some expert knowledge. Maintaining the server over time can also need someone with know-how. Who better to turn to for this kind of support than the people who created the software?
Many open source businesses sell their own support services and contracts. Much like commercial software support, these service contracts can provide varying levels of support. You can charge the highest rates for immediate phone support and offer lower rate plans for slower e-mail based support.
2. Sell Value-Added Enhancements
Although the basic open source software may be free, you can create and sell add-ons that provide additional value. For example, the open source WordPress blogging platform includes support for "themes" or visual layouts. There are many free themes available of varying quality. Several businesses have come along, such as WooThemes and AppThemes, who sell highly-polished themes for WordPress.
Either the original creators or third-parties can make and sell enhancements for open source projects, making this option a great opportunity for making money.
3. Sell Documentation
A variation on commercial support, some software projects can be difficult to use without documentation. Making the source code available for free does not obligate you to give away the documentation, as well. Consider the example of Shopp, an e-commerce plugin for WordPress. Shopp is an open source project, but to access the documentation you need to pay for a license that provides entry into the web site. It is possible, and perfectly legal, to setup a Shopp store using the source code without documentation, but it will take longer and you won't know all of the features available.
Even if you did not create the open source software, you can author a manual sharing your expertise and then sell that book either through e-publishing channels or traditional book publishers.
4. Sell Binaries
Open source code is just that-source code. In some computer languages, such as C++, the source code cannot be run directly. It must first be compiled into what is called a "binary" or machine code. Binaries are specific to each operating system. Depending on the source code and the operating system, compiling into a binary may range in difficulty from easy to very difficult.
Most open source licenses do not require the creator to give away free access to compiled binaries, only to the source code. While anyone can download your source code and create their own binary, many people either won't know how or won't want to take the time.
If you have the expertise to create compiled binaries, you can legally sell access to these binaries for different operating systems, like Windows and OS X.
5. Sell Your Expertise as a Consultant
Sell your own expertise! If you are a developer with experience installing or customizing any open source application then you have marketable skills. There are always businesses looking for project-basis help. Sites like Elance and Guru.com are freelance markets that can put you in touch with employers who will pay for your expertise. You do not need to be the author of open source software to make money with it.