Open Source's Amateur Wealth Creation is Priceless

We all know that open source is valuable, but how much is it worth in good red gold? Here's another attempt to come up with a number:

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.

Now, you can quibble with the number itself, but what interests me is the last point: that the vast majority of the “worth” of open source comes from people in their bedrooms and hackers in small companies. Against a background of massive wealth *destruction* in the financial sector by self-styled professionals, this massive wealth creation by amateurs is, well, priceless.


Copyright © 2009 IDG Communications, Inc.

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