The key difference between Linux and BSD, and all other major operating systems is that the programming source code is available on the Internet. Anyone may take the Linux and BSD source code and change it to suit their needs, usually submitting the changes to the original authors. The improvements are then available in subsequent versions of the operating system, and other people have the chance to review the improvements and make them even better. It is this liberty to reuse and change the source code that distinguishes the open source development model.
The source code is also available free of charge.
Both

Microsoft has showed us what happens if too much reliance is placed on any one operating system. BSD and Linux complement one another. The developers of each monitor the source code of the other with a view to improving their own product. Many companies find that the mainstream support for Linux with a choice of training, distribution supply, wide range of hardware supported and other amenities make it a sure bet. The world's number one and number two computing hardware companies, IBM and Fujitsu have made far-reaching committments to Linux. A smaller number of companies with specific needs or staff with BSD experience have used BSD to great effect, including Microsoft Hotmail and Yahoo.
Linux is a completely new implementation of the UNIX standards, started in Finland in 1992. Linux has succeeded where commercial UNIX failed for more than ten years, in bridging the gap between the technical capabilities of UNIX and the expectations of users brought up in the age of PCs. Linux has good support for multimedia hardware and can even emulate network clients from Microsoft, Novell and other companies. Linux contains some very new and forward-thinking operating systems research, and so it doesn't have the history of continuous small refinements and torture-testing of its stablemate, BSD. Linux development is influenced more by Europeans than those of any other single region, and perhaps because of this Linux is becoming very well-adapted to those who speak no English.
BSD stands for ``Berkeley Software Distribution''. Its source code can be directly traced back to UNIX of the early 1980s. From a technical viewpoint, this makes BSD genuine UNIX rather than a clone, though BSD does not have the right to the UNIX trademark. The original implementation of the Internet protocols (TCP/IP) was developed on BSD, and the BSD networking stack, continuously worked on for twenty years, is very highly regarded for its stability. BSD is the most popular operating system for the 100 busiest websites in the world. BSD operating systems have a distinctly American flavour, and are designed for English speakers.
The kernel (or core) components of both BSD and Linux are UNIX-compatible. This means that if an application runs on commercial UNIX such as Sun Solaris or Hewlett Packard's HP-UX, then it will probably run on Linux and BSD with a simple recompile. In fact Linux has achieved such a presence that applications are often developed on in the first place.
The Linux and BSD kernels need applications to run in order to be useful. The central group of key applications for both contains many contributions from the GNU Free Software Project.
The applications that are normally supplied with these operating systems are identical between Linux and BSD. There are about ten thousand open source packages, including graphical user interfaces, web servers, mail servers, file servers and much more. A new user can simply opt to have some reasonable choices made for them by installing a pre-selected group of open source applications, in what is called a distribution of the operating system.
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