How do you measure the value of free and open source software (FOSS)? That's a puzzler, because it's, well, free. Moreover, a popular distribution like Linux can incorporate the contributions of thousands of individuals working remotely from around the world. That means that there are almost no associated overhead costs over and above the time of the developers themselves.  Even the question itself is a bit of a misnomer, because one measure of the value of FOSS is not the cost to build it, but rather the avoided cost of not having to do so. Because you don't have to pay anything to download FOSS, and since the same project that developed the software will continue to maintain it for you, using free software can allow you to launch products and services that, for economic reasons, you would never otherwise attempt. In an effect that's near and dear to my heart, that means that competition can reenter market niches that had become locked up and stagnant because entry costs to new participants were simply too high. Trying to get a handle on the value of FOSS is still a worthwhile effort, though, because it allows people to appreciate the beneficial effects of FOSS in general, as well as to have greater respect for something that arrives without a price tag. By appreciating the amount of effort that goes into FOSS, not only historically but on a weekly basis, it's easier to appreciate the robustness and responsiveness of the product as well. It also helps anticompetition regulators and legislators appreciate the significant pro-competitive effects that FOSS can have. Today, the Linux Foundation is releasing a report titled Estimating the Total  Development Cost of a Linux Distribution that shows just how valuable FOSS really can be, using the Fedora distribution of Linux and the Linux kernel itself as examples. (Disclosure: I am legal counsel to LF.) The effort is particularly interesting as the authors (LF's Amanda McPherson, Brian Proffitt and Ron Hale-Evans) use the same methodology employed by respected industry expert David A. Wheeler in 2002 to value a related Linux Distribution (Red Hat 7.1). The run up in value wrought by six additional years of global collaboration is an eye popper.  

Just how big a run up is that? Wheeler concluded in 2002 that it would have cost $1.2 billion to develop Red Hat 7.1 using typical proprietary means. Today, McPherson, Proffitt and Hale-Evans price it out as follows:

Using 2008 salary figures, the tests published in the paper revealed that if developed today, the full set of Fedora 9 distribution packages would cost $10.8 billion. The Fedora 9 distribution contains 204.5 million lines of code in 5547 application packages. The development effort estimate comes close to Person Years.

The paper makes interesting reading from a number of other perspectives, but it’s hard not to pause on some of the numbers themselves. Here is some more data on the Fedora 9 release:

Over 1,000 developers, from at least 100 different companies, contribute to every kernel release. In the past two years alone, over 3,200 developers from 200 companies have contributed to the kernel.2 It’s important to note that the kernel is just one small piece of a Linux distribution. A distribution is actually made up of multiple components including the kernel, the GNOME and KDE desktop environments, the GNU components, the X window system, and many more. The total of individual developers contributing to these projects surely numbers in the thousandsu

How about just the Linux kernel? Here’s the summary, measured in the same fashion:

Applying this test to the Linux kernel included in Fedora 9 found the value to be 6.8 million lines of code worth $1.4 billion. The development effort estimate for the kernel alone exceeds 7500 Person Years.

So how about those avoided costs? The value of FOSS is being particularly appreciated in the rapidly expanding mobile space.  Here are some current examples of the impact of multiple Linux-based platforms being made available:

• Small but nimble platform companies like Asus have created the new, low cost, mini-laptop form factor.  In its cheapest mode it runs on Linux and pre-loaded with other FOSS, such as OpenOffice.org
• Companies are creating products totally outside their historical competencies, such as Amazon’s Kindle reader, and the new Android mobile platform launched and supported by Google
• Mobile phone vendor Nokia has opened openedup its Symbian operating systems to developers
• One of the largest handset manufacturers (Taiwan’s HTC), which until now only sold its wares to others to sell under their own brands, is now launching its own branded products – based on the new Android platform.

In each case, it is the free OS that makes it all possible.  And in many cases, the decision to go open was also driven by awareness of the further free benefits that FOSS can provide.  That benefit, of course, derives from the hordes of independent software vendors that will take advantage of an open platform and a huge market to create own products and services to their own advantage. That makes the host platform, in turn, much more attractive to customers, and the virtuous circle continues to turn for the benefit of all.

The lessons, then, are clear: the benefits to be achieved through the FOSS development process can be huge. Not only does this method help vendors share costs through collaborative benefit, but it reopens old, consolidated market niches to new competition, and allows a wealth of innovative new companies, and even individual developers, to create new products and services in what can only be called an explosive fashion. The result is more choices, lower costs, greater innovation, more rapid technological progress, and a healthy and efficient marketplace.

Which, ahem, is something that we would all like to hang on to during these current turbulent times.

There is, of course, much more to be found in the report, which you can find here. The LF press release can be found on line here, and as usual, I have reproduced it in full below for archival purposes.

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Posted by jennifer in Press Releases |

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