Study: Open source worth $387 billion (in savings)

Article Source The Open Road
April 15, 2009, 7:07 am

There’s a lot of money in free software.

That’s good news, because as the recession takes its toll on IT budgets, a new study suggests that companies can save $387 billion in development costs by using open-source software.

Talk about a stimulus.

Black Duck Software arrives at the $387 billion number by applying industry cost estimation standards to the available 4.9 billion lines of open-source code. Additionally, the company:

Estimates that 10 percent of IT application development spending is redundant with existing open-source projects, (which means that) U.S. companies could realize savings of more than $22 billion a year through the reuse of (open-source software) in application development.

These findings are consistent (if a bit inflated) with those from a 2006 study by the European Commission’s Directorate General for Enterprise and Industry, which found that it would cost European firms 12 billion euros to reproduce the then-extant (high-quality) open-source code base.

They’re also a nice counterbalance, Glyn Moody argues, against the claims that intellectual-property infringement costs the U.S. economy $250 billion each year.

While it is undoubtedly true that some companies lose money to IP infringement, the much bigger drag on the system is all the money wasted trying to protect IP in 20th century ways (digital rights management being one of the classic attempts to treat digital goods like physical property).

Open source frees us from some of these traditional shackles and enables software to spread more freely (as in freedom), yet not without charging for services and software that accompany it. The $387 billion number may be over- (or under)-stated, but it becomes relevant when your own IT group is able to shave licensing, deployment, and development costs by using open-source software.

Yes, you can.

With budgets being cut, now is the time to tap into the innovation and flexibility of open source. Open source isn’t solely or even chiefly about reducing costs, but that’s a great side effect.

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