Is Linux really worth USD $10 billion?

Just how do you put a value on an open source, free for all, piece of code such as Linux? The Linux Foundation has attempted to do just that, and valued just one single distro at more than USD $10 billion.

The nonprofit consortium charged with fostering Linux growth, the Linux Foundation , was only founded last year. It sponsors the work of Linux creator Linus Torvalds and has support from Linux and open source companies around the world.

The Linux Foundation dedicates itself to 'accelerating the growth of Linux' but what if you wanted to build a Linux distribution yourself, right now? Something like Fedora 9, for example. How much money would that need given software development costs today?

Amanda McPherson, Brian Proffitt and Ron Hale-Evans put their collective heads together and did the math in a newly published paper title "Estimating the Total Development Cost of a Linux Distribution."

So, did the intrepid trio really discover that the true value of Linux code is USD $10 billion? No, of course not. They discovered that it was USD $10.8 billion!

What's more, they say, it would take USD $1.4 billion just to develop the Linux kernel on its own. Which is more than the USD $1.2 billion David A. Wheeler reckoned it would take for a fully blown Linux distro (Red Hat Linux 7.1) when he did a similar study back in 2002.

How did the authors come up with those figures? Well they examined the Fedora 9 distribution using the same tools and methods as Wheeler before them, specifically the SLOCCount tool that estimates value and effort of software development based on the COnstructive COst MOdel (COCOMO).

What about the Fedora code and the Linux kernel itself, and what conclusions can we draw from the figures when it comes to monopolistic software companies and the development of proprietary code?
The Fedora 9 distribution contains 204.5 million lines of code in 5547 application packages, and in terms of development the authors estimate would require some 60,000 man years to complete. Using 2008 salary figures, they came up with the USD $10.8 billion number.

The Linux kernel as included in Fedora 9 has 6.8 million lines of code, and would need more than 7500 man years to develop, hence the USD $1.4 billion figure.

But does this really mean the same thing as putting a real world value onto Linux itself? The study makes it very clear as to the enormous economic value that a collaborative development of this nature can attract.

You only have to look at the last couple of years worth of Linux kernel development with some 3200 developers spread across 200 companies making a contribution to get a glimpse of the scale of effort involved.

Oh, and don't forget to then scale it ever upwards when talking about a full Linux distribution.

The conclusions are made all the more relevant after a year in which we have seen Linux increasingly bursting into the public consciousness courtesy of the netbook explosion, for example, which quite simply would not have been thought possible a couple of years back.

These devices, that market success, would not have been possible without Linux and without the collaborative development model behind it.

Report author Amanda McPherson, also a Vice President at the Linux Foundation, says "Monopolistic software companies used to be able to fund heavy R&D budgets, keeping out competition. Given the cost associated with building an OS like Linux, one wonders if proprietary companies will ever go it alone again.”
Resource - iTWire