Let's say we are planning to use an open source project under GNU Lesser General Public License to develop a cloud-based social networking system (a web-based system having horizontaly scalable databases as back end). The completed application will be closed sourced.
So, if we use the source code licensed under GNU Lesser General Public License, or even if we modify it, are we allowed to do that (ie. are we violating the license if our completed product will be closed source.)
The completed application will be commercial based - BUT we are not selling any packaged product - and we will make profits by advertising or download apps, for example.
Yes, you can use modified sources for GPL or LGPL software in your cloud service. You only need to publish your modifications if you distribute the binaries.
This "loophole" is closed by the AGPL.