Estimating the Development Cost of Open Source Software: $387B of “Shovel Ready Code” the Private Sector Can use to Fuel Growth and Innovation
$22B of US Development is Redundant with Open Source Projects, Could be Spent on Innovation
Open source software (OSS) and collaborative development have grown from being academic pursuits in the early 1980s into a major economic and development force transforming the way software is created today. According to our research there are over 200,000 OSS projects on the Internet representing more than 4.9 billion lines of available code. We estimate that reproducing this OSS would cost $387 billion and would take 2.1 million people-years of development. In addition, we estimate that 10% of US-based development, representing $22 billion, is redundant and could be offset using OSS, much of which can be reinvested for true innovation. This is in effect a potential fiscal stimulus for innovation, larger than many of the programs in the Obama administration’s $787 billion fiscal stimulus plan.
Open source software (OSS) and collaborative development have grown from an academic project in the early 1980s into a major economic and development force transforming the way software is created today. The compelling economics of open source software and the enormous pool of open source projects, combined with increasing competitive forces, are driving open source adoption into the mainstream.
In the current economic and budget climate, development organizations are increasingly turning to open source software (OSS) to maintain the speed of innovation and to reduce costs. Fiscal stimulus packages in the US valued at hundreds of billions of dollars are being appropriated to get the economy back on track. While the US and other Federal Governments around the world are doing their part to stimulate the economy; what can the private sector do to help itself, to fuel its growth? We believe one answer is for software development organizations and IT organizations to tap the vast pool of OSS and thereby write less of their own code and stop reinventing the wheel. This will enable them to shift scarce resources into projects that represent innovation and competitive differentiation.
Black Duck Software has been tracking the available pool of known open source on the Internet since the company’s founding in 2002. Today we have the industry’s most comprehensive database of open source software and related metadata. According to our research, there are over 200,000 open source projects representing over 4.9 billion lines of code. Given the quantity of OSS projects representing just about every facet of an application, is it feasible to find OSS code to displace 10%, 25% or more of development? At Black Duck we’ve worked with many customers that use a much higher proportion of OSS code in their projects, some up to 88%. We believe that the answer to this question for most development organizations is a definitive “yes.” With 4.9 billion lines of “shovel ready code” available to developers OSS is a stimulus resource that can help development organizations around the world increase innovation, stretch budgets and spur growth.
Estimating what OSS code is worth is difficult to answer precisely, but we have made an estimate using widely accepted methods to get a first-order approximation. In October 2008, the Linux Foundation published their estimate of the value of Linux for both Fedora 9 ($10.8 B) and the Linux Kernel ($1.4 B).
http://www.linuxfoundation.org/publications/estimatinglinux.php
Using a similar cost estimation approach in combination with our research and analysis of open source projects, we estimate that it would take $387 billion (2008 dollars) to develop the available OSS by traditional proprietary means. A more detailed explanation of the analysis is presented in the section “Estimating the Cost to Reproduce OSS.”
Estimating Redundant Development Spending
Knowing what it would cost to reproduce OSS is one way of looking at its potential. Another approach is to estimate application development spending that is redundant because it could be eliminated by OSS that already exists. The pool of available OSS projects can help every facet of development and goes well beyond the popular Linux operating system, web server and database tools. For example there are projects for various libraries, parsers, application frameworks, user authentication modules, business reporting, fonts, content management, GIS toolkits and much, much more.
We estimate redundant development from IT spending on application development.
Gartner Dataquest (March 2009) recently estimated 2009 Global IT spending at $3.235 trillion. In a separate report Gartner (IT Key Metrics November 2008) estimates that 20% of global IT is spent on application development, which represents $647 billion. Based on Black Duck’s customer experience, we conservatively estimate 10% of application development is redundant and could be offset using OSS. Taking 10% percent of the $647 billion spent annually on application development yields $65 billion in potential global savings that can be reapplied. The US is approximately one third of global IT spending, making US savings approximately $22 billion.
Conclusion
Open source software has grown from its early days of GNU tools and Linux to represent over 200,000 projects covering just about every facet of software. To reproduce this valuable software resource would cost over $387 billion. In addition, we estimate that in the US, development organizations spend $22 billion on code that is already available as OSS. Development organizations can tap OSS to write less of their own code and not reinvent the wheel, shifting scarce resources into projects that represent innovation and competitive differentiation.
