Have you heard about the Yocto Project? Even if you use Linux or write applications for Linux you may not know about it. It is essentially tools for making tools. In this case, it is for making Linux to run on that custom piece of hardware you just designed so you can write the software to make it work.
The Yocto Project is an open source endeavor that is supported by a wide range of commercial vendors. This means you can roll your own, on your own, or get the tools as part of a supported commercial package. The tools have been used with popular open source hardware like the BeagleBone Black (see Interview: Jason Kridner Discusses The BeagleBone Black). The tools include packages like BitBake that has a graphica front end, HOB (Fig. 1), for building a custom Linux image.
Read more at Electronic Design.