There are other ways free software developments are funded. Consider the
Linux kernel (but you could actually take any large application): most of the
developments is made by people employed by companies interested in having a
good Linux kernel. For instance, a company selling hardware wants a kernel
exploiting the hardware at its full potential (e.g., Intel develops the
driver for its graphic chipsets, Texas Instruments for their ARM chips,
Broadcom for their Wifi chips, etc.). Google builds Android upon Linux and
employs kernel hackers to achieve its goals. A company in the server market
wants the best possible kernel to be competitive (e.g., IBM is among the
top-10 contributors, Oracle develops Btrfs, etc.). Red Hat and Novell
actually are the greatest contributors to the last versions of Linux kernel.
Take a look at the statistics. The page includes a ranking and mentions that
more than 200 companies were involved in the development of Linux 3.3.
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