The Linux operating system (OS), its kernel and major system components (as well as the majority of user applications for it) is free software. This means that they can be installed and used on any number of computers and distributed for a charge or for free without any limitations. This also means that the source code of these programs can be obtained freely and any changes can be made to them.

The fact that this software is free made it quite widely used and attracted interest of thousands of developers to it. The main Linux programs are released under the GNU General Public License (GPL) license, that not only guarantees freedom of their use, but also protects this freedom: further distribution of these programs is allowed only under the same license. This is why the source code of the Linux kernel, compilers, glibc library and KDE and GNOME graphical user environments cannot be used to create closed source applications. This is the principal difference between Linux and BSD free operating systems (FreeBSD, NetBSD, OpenBSD), fragments of which were included in the Microsoft Windows family of operating systems and even became the basis of Mac OS X. Linux includes a lot of BSD code, but its compilers and system libraries have been developed as a part of the GNU project.

In contrast to Microsoft Windows, Mac OS and proprietary UNIX-like systems, Linux developers have no geographical headquarters. There is no company that owns this OS and no single coordinational center. Programs for Linux are a result of work done within thousands of projects. Some of these projects are centralized, some are concentrated in specific firms, but the majority are joint efforts of programmers from all over the world, who communicate with each other by e-mail only, and often never meet at all. Anyone can create his or her own project or join an existing one. In case of success, the results of his or her work will be known by millions of users. Users participate in testing of free software and communicate with developers directly, which makes it possible to find and fix bugs quickly and to implement new features.

This is a flexible and dynamic development system, impossible for projects with closed source code, that determines the exceptional business effectiveness of Linux. Low cost of free development, well-established testing and distribution mechanisms, participation of people from different countries with diverse perceptions of certain problems, and protection of code by the GPL license: all of these are reasons for the success of free software.

Naturally, such effectiveness of the development process could not have failed to arouse interest on the part of big companies that started to open up their own projects. This is how Mozilla (Netsape, AOL), OpenOffice.org (Sun), a free clone of Interbase (Borland), and SAP DB (SAP) came to be. IBM also helped to port Linux onto its mainframe computers.

On the other hand, open source code significantly lowers the cost of development of proprietary systems for Linux and makes the solution cheaper for users. This is why Linux is often recommended as a platform for such products as Oracle, DB2, Informix, SyBase, SAP R3 and Domino.

The Linux OS has inherited from UNIX its stability and its excellent security. The system of file permissions allows Linux users not to be afraid of many viruses, which terrorize the world of Microsoft Windows OS. At this time, totally bug-free code just does not exist, and Linux is not an exception to this rule. But, because the source code of Linux programs is open, the auditing of it can be carried out by any specialist without a need to sign any non-disclosure agreements. This is why security problems are found most effectively and corrected very quickly. A mechanism of security bug reporting and correction has been created by the Linux community. It involves specialists from various development companies and independent programmers.