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I realise that as a home user I can download and use Linux, Apache, PHP and mysql for free, but just being curious what happens when a business wants to use this software ? do they have to pay or is it still free for them ??
Well you got it for free didn't you, so what makes you think businesses can't either ? Its one of the many reasons businesses are using Open Source, there are no licenses to deal with and most of the time it is free.
I'd suggest reading the GPL, it explains everything on OpenSource software and technology.
I have had a quick look at the GPL as you suggested, I must be to use to having to paying for everything that I automatically thought business users would have to pay.
So how can people afford to work on these software projects if there is no income from them ? do peope just work on it in there spare time ?
If so they must have a lot of spare time on their hands.
Lets take Redhat for example. They create a distribution of Linux they give away for free for download, they also sell boxed verisons, they provide paid support, they make documention and books.. etc. That is one way they make money to pay their employees who in return create alot of the applications and tools used in Linux now.
There are also alot of programmers and developers who work for other companies and then create, work on open source applications in their spare time.
And don't forget the academic world. There are quite a number of students studying computing as undergraduates and graduate students. The availability of the source code opens the door for academic experimentation. The students typically contribute to the body of open source through open-ended projects. There's no better way to learn the ins and outs of an operating system, networking, compression, device communication, etc. than to play with it. Professors know that, and in my experience, encouraged it.