we analyze conflicting opinions regarding research on the value of open software

we analyze conflicting opinions regarding research on the value of open software

We have already talked about the post-open-source model in the habrablog beeline cloud, and now we will look at a study prepared by Harvard Business School (HBS) experts with the support of the Linux Foundation. They presented a model for assessing the economic impact of open software in the development of the IT industry. This is not the first attempt to measure the “value” of open source software (OSS). We decided to look at what research has been done before and figure out why the new HBS work has garnered such conflicting opinions.

Image – Graphic Node – Unsplash.com

Why measure the value of open source software at all?

Researchers seek to assess the role of open source projects in the modern economy in abstract terms, but also to express them in concrete numbers. Usually, for this, financial indicators are measured, which can be influenced by open source software – the volume of revenue, profit or costs for the development of applications in companies. This data helps establish the objective value of open source for business, which contributes to the growth of investment in the industry, the introduction of innovations and the development of the ecosystem as a whole.

There are different approaches to measuring the economic impact of OSS. And one of them is based on classic surveys. They usually involve top managers of IT companies who can comprehensively assess the role of open source in business from the point of view of finances, technologies, and processes. For example, in 2023, a specialist from the University of California (with the support of the Linux Foundation) conducted a study in which he relied on the opinion of the management level of organizations from the list of Fortune 500 organizations. Up to 75% of respondents answered that the benefits of using OSS exceed its costs. However, it is obvious that the survey method has a serious drawback – the survey reflects only the subjective value of open source software within the framework of a single perceived organization.

There are other methods of economic evaluation, for example, taking into account objective indicators. They allow us to define the value of open source in a different way. Such a study was conducted in 2018 in the European Union. They calculated that a 10% increase in the number of commits in open projects led to an increase in European GDP by 63 billion euros. As part of the study, surveys were also conducted, which highlighted interesting details, for example, the smaller the company, the greater its contribution to the development of OSS. But even with such an approach, the results are always unambiguous.

To avoid limitations in methods and calculations, some researchers try to measure the value of OSS in terms of developer labor costs. In this case, they seek to find out how much it will cost to develop open source products from scratch on the part of organizations and user ecosystems. But even here there are complications — for example, estimates will differ depending on the chosen software distribution model. If it is republished under open licenses, that’s one cumulative development cost. If these projects are distributed under commercial licenses (or they do not go beyond the infrastructure of the author company at all), then the number of software solutions in the industry will multiply, as will the costs of their design.

Given the large number of pitfalls and uncertainties, it is not surprising that a new study by Harvard Business School has attracted special attention from members of the IT community – let’s talk about it in more detail.

Research methods and results

In the work, the authors tried to take into account the cost of reproduction of all open source projects in several situations caused by different licensing conditions. Specialists used data from the Census II project and BuiltWith datasets. Census II is a list of open source software that organizations most often work with. It is compiled on the basis of data from vendors providing solutions for software composition analysis (SCA analysis). They check whether the software does not violate the licensing rules and immediately identify all the open source packages used in it. In turn, BuiltWith provides data on the technologies on which nine million websites are built. Scientists mapped these vaults of information to reduce the likelihood of duplicate software packages by count.

To estimate the cost of reproducing open source code, the authors counted the number of lines in software programs and applied the COCOMO II (Constructive Cost Model). It allows you to give some estimate of how many man-hours it would take to write a program from scratch. Data from the company Salary Expert were used to calculate the salaries of developers. As a result, if you calculate that each company will have to independently rewrite all the open source that it uses, the development costs will increase to 8.8 trillion dollars. [это в 3,5 раза больше затрат на проектирование программного обеспечения сегодня].

Critical assessment

Not everyone agrees with the conclusions of the Harvard researchers. One of the most comprehensive critical reviews was written by developer Chad Whitaker, who was at the origin of some open source projects, such as the Aspen library. Now he manages open source development directly in a commercial company. Chad disagrees with the conclusion that without open source software development would cost companies 3.5 times more.

Image – Jason Dent – Unsplash.com

The main argument against is that the authors of the study do not take into account that the software can not only be developed anew, but also simply bought from another company. This oversight led to the fact that the calculation results were overestimated. According to Chad Whitaker, the cost of software development in the absence of open source would be only 1.00005 times more expensive. However, even these arguments are called into question – if there really was no open source software in the world, then commercial products that also rely on open source capabilities would be much more expensive.

You can also find the opinion that the authors of Harvard Business School underestimated the economic importance of open source. The results of the calculations seem to be underestimated if you look at the number and scope of projects at least in the Linux ecosystem.

At different times, there were many studies that tried to imagine the cost of developing the Linux kernel. In 2004, it was valued at 612 million dollars. Only two years later, another group of specialists reached the figure of one billion dollars. In 2013, Spanish scientists also estimated the cost of developing the Linux kernel at 1.2 billion euros. All this provided that at that time the project contained about 15 million lines of code. Since then, the kernel has grown to 28 million lines of code — that is, almost twice as much. As for distributions, in 2008 the Linux Foundation estimated the cost of designing the Fedora operating system at $10 billion. It is safe to say that in today’s money, this figure has only increased.

Also, the participants of the discussion on Hacker News note that to support one Firefox browser with 21 million lines requires several hundred million dollars per year. In this regard, there are doubts that the development of all OSS packages can be limited to a few trillion.

What people generally think about the importance of open source

There is much debate about the economic value of OSS. Some try to measure it in financial terms, but face criticism from the community, while others consider all attempts pointless. One of the arguments for such a position is that if there is no open source software in the world, then this is already an alternative reality in which current corporations would probably not be able to achieve the same success.

If you develop this idea, you can question the very fact of the existence of companies like Google in the absence of an open source ecosystem. Professor Daniel Lemire of the University of Quebec notes that modern corporations “grew up” literally immersed in the ecosystem of open software. Businesses that turned away from open source were left behind and lost their edge in the competitive environment.

Other experts also point out that trying to calculate the value of open source software cannot take into account all the variables and circumstances. And in this context, it is better to consider the impact of open source not from the point of view of economy, but from the point of view of innovation, accessibility and transparency of the code, development of standards that move the entire IT industry forward.

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