The financial value of Open Source

What’s the cumulated financial value of the today existing open source code base? It’s a big number, for sure. If you take published numbers and multiply them in a simple exercise, you might come close to the truth. Blackduck claims to have indexed a couple of billions of lines of code in its repository. Assuming they only index 70% (they mention 185’000 projects) and “a couple” is “5″ then we might end up with 7 to 10 billion lines of code. If we multiply this with the estimated value (or cost to develop) of one line of code (let’s take 15 USD for the exercise here), we end up with a total value of USD 100 to 150 billion. What is interesting here is that only a little piece of this is funded by Venture Capital (the 451 Chaos blog mentioned 2.95 billion USD total investment (and most of it goes into marketing and sales, rather than into product development) until today), so where is the rest coming from? I would assume that some of it comes from enterprises and large organizations, but this is probably max 20-30% of it. The bigger share actually comes from individuals and small companies, people either sharing what they have done with a social idea behind or planning to build or extend a business around it.Another interesting question is whether these “investments” will go up or down during the tough times we are going through. I actually think they are likely to increase because of two reasons. First, there’s a lot of development capacity available in large companies, but little money to spend for buying software. Companies are trying to keep their staff busy, so it’s well possible that they invest in some piece of software and share it with others. Secondly small companies will suffer of less demand from their customers, they will have time available to invest into the future. As the open source approach has proven to be a good vehicle to publish and market software, many will take this route.What does this mean for all of us? Well, yes, we can expect more good software coming from the Open Source world and the innovation will continue.