Moodle is open-source software that has been released freely under the GNU Public License. This means that you are allowed to copy, use, and modify Moodle, provided that you agree to: provide the source to others; not modify or remove the original license and copyrights, and apply this same license to any derivative work.
However, the name Moodle is copyrighted which means only authorized companies are allowed to sell related services.
The questions frequently asked are:
How is Moodle being developed?
How does Moodle make money?
Let us shed some light on these two valid questions. At the core is the Moodle Trust, set up by Martin Dougiamas, that manages the Moodle project.
The Moodle Trust employs a number of full-time software developers who are implementing and co-ordinating the development of the software. Programmers around the globe contribute to the development. Some are core developers; some contribute through testing, while others offer small-scale patches and amendments. While some are paid by employers who benefit from Moodle such as universities or companies, others are volunteers who are enthusiastic about Moodle, or programming, or both.
A roadmap exists for Moodle, which is driven by feature requests from the Moodle community. These are users who either post requirements on tracker.moodle.org or who provide feedback at Moodle conferences called MoodleMoots. Some features are paid for (see Business Model section), for example, Microsoft part-financed the development of the XMLDB database abstraction layer.
The Moodle trust has three main revenue-generating channels:
Moodle Partners (www.moodle.com)
Moodle Partners are companies that have been authorized by the Moodle Trust to carry out Moodle services (such as hosting, support, training, branding, development, and so on) in a particular territory, and use the Moodle trademark. It is similar to a franchise model, where each franchisee pays an annual fee and a commission on its revenue to the franchiser. There are approximately 40 Moodle partners world-wide, which displays the highest professional standards.
Institutions, companies, and individuals contract the Moodle Trust to implement functionality to its product. Most of these new features will then be made available to the community.
Donations
Many Moodle users including businesses, educational establishments, and individuals have funded the Moodle project through donations.
The two main expenses of the Moodle Trust are staff salaries and the maintenance of its community site www.moodle.org, which includes free forum-based support, full documentation, a bug tracking facility, and many more features.
If you want to deepen your knowledge on development and business models of open-source software, The Cathedral & the Bazaar by Eric S. Raymond is a must-read. For more information on the Moodle model, search for Moodle: a case study in sustainability by Martin Dougiamas who is Moodle's benevolent dictator.