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What's The Linux Kernel Worth?
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.
By my calculations, the Linux kernel is worth: nothing.
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.
Javascript + Nintendo DSi = DSiCade
612million / [Developers.Count] = $650 (per machine)
;)
Who woulda thunk it.....
liqbase
we should get a better estimate by asking the nice folks at SCO. They seem to know much about this.
... put a price on it. Linux is priceless. Mac OSX is $50.00. Windows is a paperclip and a bubblegum wrapper.
I'm going to go create my own technology news site, with blackjack and hookers. You know what? Forget the news site.
"They want me to be a whore!" -- Linus Torvalds.
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After an offer by one Jeff V. Merkey to pay 50K USD for a BSD-licensed copy of Linux
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?
It's like trying to put monetary value on a Van Gogh or a Matisse. The Linux kernel is truly priceless. You could never get that kind of collaboration even with the most highly paid software engineers, beacuse they don't do it for money, neither did Van Gogh.
What is air worth? Some things have great value, but simply trying to measure that value in dollars is to misunderstand the nature of that value.
My next sig will be ready soon, but subscribers can beat the rush
We can, to some extent, model the overall economy and predict economic growth, but such models are imprecise. Further, modeling the overall economy is easier than predicting the precise value of a particular good or service because the overall economy is a lumped parameter, the net result of a multitude of forces. Consider predicting the price of an individual stock versus predicting the price of the S&P 500. The latter is hard but roughly do-able; the former is impossible.
So, attempting to calculate the value of the Linux kernel is just another exercise in voodoo economics (tm).
If we really could calculate precisely the value of the Linux kernel, then the implications would be enormous. We could then calculate the true price of all goods and services in the USA. There would be no need for a market economy. The government could then control the economy in much the same fashion that Lenin proposed. The government could then give everyone a number representing each person's correct salary and, also, assign the correct price to everything. There would be no unemployment or recession.
Nirvana.
Clearly it's $699.
Why bother.
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
Quidquid latine dictum sit, altum videtur
You are assuming that market value is the only measure of worth. Even in capitalist accounting (GAAP) you are mistaken.
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.
There seem to be a remarkably large number of people posting on this one who haven't read past the title, never mind the article.
This isn't about a consumer price for a kernel binary. Comparisons with copies of Windows are irrelevant. The $612 million dollars quoted is a suggested figure representing the kind of cost a commercial company would have to take on to develop an identical operating system kernel.
Software companies have in the past changed hands for large sums of money. The brand is of course worth some of that money, as are relationships with existing customers, but a large part of that value is the IP possessed by the company. There are few companies that have possessed software assets of a complexity and widespread use comparable to the Linux kernel that have changed hands, and such companies when sold have been bought for large sums - to pick one example, Netscape was bought by AOL at a price tag of $4.2 billion dollars.
The value of the Linux kernel code and Linux branding, if a company with sufficient resources were interested in obtaining it, and if it were for sale, would quite probably exceed this figure of $612 million by a sizeable percentage.
$50K is a derisory offer for even an non-exclusive right to develop and redistribute the IP, which is effectively what a solitary copy under the BSD licence would give. Certainly the company I work for would laugh helplessly if such an offer was made for our code, which is several orders of magnitude smaller and less complex than the kernel.
Savant
We have BSD-licensed Unix variants, and we have a GPL-licensed one. How is this different from what you're proposing?
The problem is that the people who have contributed to Linux have specified the GPL. They do this, because in return they get anyone else's improvements to their code, and they also benefit from the entire GPL community. It isn't altruism.
It's interesting to note that Linux picked up a large set of talented developers very quickly. When Linux was starting up, BSD was mired in some legal battles, which certainly hampered it. But since then, developers have worked on GPL projects like Linux more than on BSD-licensed projects. There are many possible explanations for this, but it's a strong indicator that the GPL is more attractive to developers.
More threatening scenarios have been mentioned on the mailing list than simple competition with a BSD or closed source Linux tree. Besides, $50k is ridiculous. I estimate $50k to be the value of the drugs that you have to be high on to think that such an offer is reasonable.
Well considering many of the developers would not work under a BSD license I say your argument is flawed. There is a BSD licensed UNIX that runs on x86. I think not as many developers work on it because what incentive does a large comany have to return it's modifications back into the free version as opposed to just saying FU, I have my fork.
Granted it does happen (as in the case of apple) but it is kindof enforced under the GPL and I think that gives the developers some solice that they wouldn't have under a BSD style license.
How would you feel if someone took your work, made a change or two and sold it as their own? I'd be pretty pissed.
According to an IBM rep who spoke to our LUG 2 years ago, IBM promised to invest 1 Billion in Linux because they had estimated it would take them $10 Billion to get it to where it was then. That was in the 2.4 stage. Now, with the 2.6 kernel, it should be worth another Billion or so. Of course, I'm willing to sell copies of the latest kernel to all comers for only $500. That includes a year of my "Platinum Support".
HexaByte - he's a square and a half!
The 3-clause BSD licence is poisonous, because it allows someone effectively to turn an open-source product into a closed-source one, just by not distributing the source code.
Not "poisonous" at all. Keep your FUD out of this. While one can take BSD licensed source code and create a binary closed source product, this is not "poisonous". The orginal source code is still there. The orginal project is still there.
It would be like someone taking one apple from a free apple tree and locking it up. Are people going to be screaming "he poisoned the tree" when he locks up one apple? Of course not!
Don't blame me, I didn't vote for either of them!
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, 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.
This isn't new in a sense; X Windows was started
this way, as was Apache. It's just become
more common.
- David A. Wheeler (see my Secure Programming HOWTO)
For some very very very very very loose definition of "Linux", FreeBSD *is* Linux! No, really. I saw an ad once for a vendor that was selling Linux distributions, and there was FreeBSD on the list of Linux distributions....
:)
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).
The Linux code is owned by, perhaps, thousands of people [the individual contributors/copyrightholders]. Each of these could sell you non-GPL rights to their code, but not to anyone elses.
Linus "owns" probably less than 10% of the code. That'a a much bigger share than the 0.05% or so that I've written, but he still can't sell it.
Engineering is the art of compromise.