What's The Linux Kernel Worth? 376
schneelocke writes "What's the value of the Linux kernel? After an offer by one Jeff V. Merkey to pay 50K USD for a BSD-licensed copy of Linux, David Wheeler does some calculations and comes up with an estimate of 612M USD." Wheeler has come up with a number of interesting software-worth estimates and other quantified facts about Free software; since some aspects involve ineffables and hypotheticals, the details can be argued, but he provides a good framework with SLOCCount.
Nothing (Score:5, Interesting)
Before you get your tights in a twist, just listen to me for a moment. The value of a product in a capitalistic system is determined by what the market is willing to bear. Yet it is not worth anything if the developers are not willing to sell it at what the market demands. Thus we have a gap. The market would probably be willing to bear a few million (perhaps as high as 50 million) dollars for the Linux IP. Yet it seems that the developers would demand a price in the range of 612 million.
The end result is that the Linux kernel has no market value what so ever. The developers won't sell it at the market's price, and the market won't buy it at the developers price.
Have to say it... (Score:3, Interesting)
Now, I have to wonder, how much would it cost to pay Microsoft to GPL their Office product file formats?
Merkey's offer doesn't make sense to me ... (Score:5, Interesting)
Why would they do that? What advantage is there to the BSD vs GPL licenses?
The only advantage is that if you redistribute or sell software that is GPLed, you have to provide source code - with BSD you don't.
So, Merkey's company wants to sell modified Linux without providing source code to the modifications. While I doubt the modifications are worth that much, he apparently does.
Why wouldn't Merkey use FreeBSD for the application he wants to sell? Almost all linux software is available for FreeBSD, and then he wouldn't have to pay $50,000 for a license.
Or can someone explain this to me?
Re:$600 M is ridiculous (Score:1, Interesting)
One thing that I could imagine the kernel hackers might agree to is a binary-only license for use in one product. But that would still cost orders of magnitude more than 50k$.
Re:Or was that Steff Murky? (Score:1, Interesting)
Sure that wasn't Stef Murky [userfriendly.org]
P.S. Same link as parent.
Price of a shrink-wrapped Mandrake distro: $39.95 (Score:1, Interesting)
Watching Steve Ballmer fly around the world making promises and cutting the price of Windows to compete: priceless
Priceless... essentially (Score:4, Interesting)
Linux - priceless .
Of course, unless you consider all those hours you pored over google results and irc chats about *that* bug in the 2.2 kernel, waay back in '99.
I've invested too much time and effort in Linux to consider it "Free" in an economic sense. But , yeah it pays to be the admin , not developers.But, I've sent my share of patches
Mu (Score:5, Interesting)
To an accountant, all assets are valued at their expense, minus any prior amortization or markdowns. Most Linux users would thus have to include in their valuation any time they spent downloading, configuring, and installing the kernel.
I would have to include a few hundred dollars for the time to develop, test, and submit the (very small) patch I submitted. With ten years of their life put into it, Linus Torvalds, Alan Cox, etc would each have to value it at several million dollars.
Re:Nothing (Score:3, Interesting)
Microsoft asks for a price for Windows. I'm not willing to pay more than 3 dollars for it. Our disagreement over this does not make Windows without market value.
The interesting exercise would be to figure out what all of us that are running Linux would be willing to pay for it if it were suddenly unavailable at no cost, not the math of what one person is trying to sell it for times number of potential installs. I think the price of what _investors_ are willing to pay for ownership is different that the market value as well.
Re:Merkey's offer doesn't make sense to me ... (Score:5, Interesting)
About two years ago I was speaking to the developer who had ported Linux to a particular hardware security device. I asked him why he had gone with Linux instead of OpenBSD as his base. He stated that it was his preference to go with OpenBSD, or any of the flavors of BSD, but he went with Linux because the company is publically committed to Linux and Linux has a marketing value that the BSDs do not. It is better to say, "Our gadget now runs Linux! Won't your developers be happy?" than it is to say, "Our gagdet now runs OpenBSD! Won't your developers be happy?"
Basically there are often non-technical reasons for wanting to use Linux even when some other OS would be a better technical fit.
Re:Merkey's offer doesn't make sense to me ... (Score:3, Interesting)
"Some adolescant university pet project to run my core systems???"
Isn't this the same opinion PHB's had of Linux?
And will there be headaches from people that "report" the lack of source to Linus, FSF, et. al?
10 Billion ++ (Score:5, Interesting)
Re:Nothing (Score:2, Interesting)
Of course as an appraiser, I know that to not be true. Just because something doesn't have a market it doesn't mean its worthless. In the case of a hypothetical family business there is no established market, yet it makes money and you surely would not give it away for free. In the case of an asset like the kernel, you'd probably have to look at the time spent developing it, times some sort of hourly rate.
Author responds... (Score:4, Interesting)
However, your next statement is somewhat missing the point: "Estimating based on what it would cost in a commercial environment is also flawed, because there are too many variables to consider." Yes, salaries and overheads vary, and they'll certainly affect the answer. But I used a U.S.-nationwide average for salaries, and several sources for the overhead value. See "Gigabuck" for more info. So this is an "average" kind of development. If you don't like those assumptions, I gave enough information for you to recompute everything using different values. But you have to make some assumptions, and I think these are quite reasonable ones; I basically picked averages to represent an "average" development project's costs.
But then you say stuff that I think isn't right: "The bottom line is, since the developers have always been paid nothing for their work (except those that are being sponsored by commercial entities) ... since in all likelihood if these guys weren't writing the code in their spare time, they would be doing some other hobby...
The bottom line here is, the only time that you can assign a value to is the time that someone actually received a wage for. This is a small minority of the overall code base, so by that method the code would not be worth much at all."
Two problems: first, I'm computing re-development cost, and presuming that the developers would be getting a wage. And second, most of the changes in the Linux kernel are from developers getting a wage to do so.
In fact, the move to wage-earning OSS/FS development has been one of the silent trends in the IT industry. In 2004, Government Computer News reported in July 2004 on a presentation by Andrew Morton [gcn.com], who leads maintenance of the the Linux kernel in its stable form, and confirmed the trend towards paid OSS/FS developers. Morton spoke at a meeting sponsored by the Forum on Technology and Innovation, to address technology-related issues, held by Sen. John Ensign (R-Nev.), Sen. Ron Wyden (D- Ore.) and the Council on Competitiveness. Morton noted that "People's stereotype [of the typical Linux developer] is of a male computer geek working in his basement writing code in his spare time, purely for the love of his craft. Such people were a significant force up until about five years ago ..." but contributions from such enthusiasts, "is waning... Instead, most Linux kernel code is now generated by corporate programmers." Morton noted that "About 1,000 developers contribute changes to Linux on a regular basis... Of those 1,000 developers, about 100 are paid to work on Linux by their employers. And those 100 have contributed about 37,000 of the last 38,000 changes made to the operating system."
For more about the general trend of employed OSS/FS developers, see http://www.dwheeler.com/oss_fs_why.html#wont-destr oy-industry [dwheeler.com].
This isn't new in a sense; X Windows was started
this way, as was Apache. It's just become
more common.
Re:Nothing (Score:3, Interesting)
It's rare that he actually contributes something worthwhile.
FreeBSD *is* Linux! :) (Score:5, Interesting)
Heck, who am I to tell 'em different? I used to refer to Abiword as "my version of Word", as in, "My version of Word seems to have problems with your file, could you try resending as RTF?" Nobody ever questioned me (which just shows how overrated the notion of Word as a "standard" is).
Re:Mu (Score:3, Interesting)
Don't think of money as having intrinsic value, or objects as having intrinsic price tags. Money is a convenient abstraction which allows us to assign relative worth to objects. I mean, imagine that air is suddenly no longer plentiful. We have to buy it. Now it's still fairly cheap, say $50/month. The end of the month comes around and you've got only enough either to pay your air bill or buy a computer game, but not both. Which do you do? Well, duh; you pay your air bill, since you'd like to continue breathing. That's where the you assign the relative worth. A game costing as much as a month's supply of air does not suggest that the two have equal value.
Want a nonGPL Linux ? (Score:1, Interesting)