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What's The Linux Kernel Worth?

Posted by timothy on from the tree-falls-in-forest-makes-sound dept.

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.

14 of 376 comments (clear)

  1. Nothing by AKAImBatman · · Score: 5, Interesting

    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
    1. Re:Nothing by millwall · · Score: 5, Insightful

      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.

      This is not quite true. The market value is what the market would buy the product for, if it WAS for sale.

      Imagine that you have a car, which you for whatever reason don't want to sell at the moment. This doesn't leave your car with "no market value". The market value is still what the market would have bought it for if it was for sale.

    2. Re:Nothing by wcbarksdale · · Score: 5, Insightful

      So the Mona Lisa is worth nothing, because the Louvre isn't willing to sell it?

    3. Re:Nothing by bickerdyke · · Score: 5, Insightful

      You are asuming that there IS a market. The OP stated that there is currently no market for linux kernels, because there is only one potential buyer and one potential seller who cant agree on a price --> no trade, no market, no market price.

      In your example there is a market for collector cars which can be used to find a market price.

      But it would be better to say "priceless" than "nothing"

      --
      bickerdyke
    4. Re:Nothing by Bombcar · · Score: 5, Insightful

      You've hit the nail on the head. The Linux kernel is Priceless.

      A DSL connection to the internet: $50
      A decent PC: $500
      Downloading enterprize-class source code: Priceless.

      There is some code you can't buy, for everything else, there's Microsoft.

      --
      Fellowship 9/11
  2. ooooh by LiquidCoooled · · Score: 5, Funny

    612million / [Developers.Count] = $650 (per machine)

    Who woulda thunk it..... ;)

    --
    liqbase :: faster than paper
  3. perhaps... by Anonymous Coward · · Score: 5, Funny

    we should get a better estimate by asking the nice folks at SCO. They seem to know much about this.

  4. You just can't... by numbware · · Score: 5, Funny

    ... 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.
  5. Merkey's offer doesn't make sense to me ... by Anonymous Coward · · Score: 5, Interesting

    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?

    1. Re:Merkey's offer doesn't make sense to me ... by John+Harrison · · Score: 5, Interesting
      I'm going to be intentionally vague here so that I don't have to post as an AC.

      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.

      --
      Lasers Controlled Games!
  6. pretty safe offer by Kwantus · · Score: 5, Insightful
    Jeff's offer:
    This offer must be accepted by **ALL** copyright holders...
    That'll be harder than getting agreement on the Charlottetown accord (a thing in which any given Canadian could find something to hate)...A) you'll never find *ALL* the copyright holders - plus the complication some have died, who of their heirs has the say? B) of the hundreds you can find it's sure a few will say No on principle.
    1. Re:pretty safe offer by Entrope · · Score: 5, Informative

      No. Some groups require that (most notably the Free Software Foundation), but many do not. Linus and the other kernel folks are part of the latter group.

      While there are some benefits to having a single copyright holder, you need a lot of bookkeeping to track everyone's copyright assignments and a lot of work to make sure they are proper. US copyright law requires that any copyright assignment be in writing and identify (in writing) exactly for what works copyrights are being assigned. Many European countries recognize "natural rights" or "droits d'auteur" that cannot be assigned to a third party. Some programmers have employment contracts that stipulate all software copyrights for things they write while employed belong to their employer, even if the software was written on the programmer's own time. Et cetera.

      Linus decided either the effort was not worth it or that there were other benefits to not requiring copyright assignments. The Free Software Foundation does go to the effort to work all the details out. If you (or anyone else) wants to have a single copyright holder for a GPLed program, I encourage you to assign that copyright to the FSF. It saves a lot of effort on your part and ensures that the copyright holder has both the resources and resources to protect the software.

  7. Misconceptions by Savant · · Score: 5, Informative

    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

  8. 10 Billion ++ by HexaByte · · Score: 5, Interesting

    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!