Can I Develop An Opensource Solution Commercially?

Yes, many commercial solutions are made open source.
About the best hosting solution: that depends on what you mean by “privacy”. if you mean that your code is private, then that is not open source. if you mean that your customers’ data is protected, then you need to look at your code and how you handle your data. If you think you can just get a static IP and put a server in your garage, that could work for non-demanding customers. Others will demand more – and what and how much more depends on your system and customers.

You’d better ask the guy who made Linux.