Comment by lanstin | Hacker News Reader

Comment by lanstin | Hacker News Reader

From one of the articles the article refers to: "[According to Harvard something] value of OSS to the economy is 4.15 Billion USD."

That seems ludicrously low - Linux itself, if you value it at $1 per install is considerably more that 4 billion USD. The various open source web projects powering all the large sites are more than billions. Banks may not pay for SSL but they receive economic value. Etc. etc.

And it's not a labor surplus except for those poor souls that are trying to make their fortune with an OSS "side project." It is a method of doing things where results are shared and improved upon, fundamentally the scientific way brought into applications. Unlike physical devices, it's essentially free to share software. Just don't put access controls on the git repos.

There is a tendency to overly productize things, but that's not the heart of open source; the heart is just to share results, perhaps in a hope that ones labor can contribute to the progress of humanity. I don't need to promise to fix issues ever for my source code to potentially have value to someone solving a similar problem.

Now, it's harder to achieve this way of working in corporations, and things have to split into "open source with some modular hooks for private things that aren't open source" (even just in-house logging or metrics systems), but it's not impossible, and does have the same advantage science has - it grows exponentially and eventually will figure out how to do anything that is doable.

The linked article says something different:

'We first estimate the supply-side value by calculating the cost to recreate the most widely used OSS once. We then calculate the demand-side value based on a replacement value for each firm that uses the software and would need to build it internally if OSS did not exist. We estimate the supply-side value of widely-used OSS is $4.15 billion, but that the demand-side value is much larger at $8.8 trillion.'

The methodology used in the underlying paper is, to put it generously, not even wrong. Way past “assume a spherical cow” territory.

It supposes you could simply hire programmers to build OSS from scratch.

If you have ever worked on a large project in a corporation, you instantly know how shockingly ignorant this is.

Hint: many of them end in failure and are never released at all.

Then there are the massive amplifications that happen due to the mere existence of open source: learning, spreading of ideas, reusable tooling, and more.

Has any business school ever produced a paper worth a damn?

https://www.hbs.edu/ris/Publication%20Files/24-038_51f8444f-...

As you say, whatever the real cost is, it's much higher than one that supposes every company could reproduce F/OSS. How amazing then, that even in this hypothetical universe where everyone could, we still wouldn't want to due to the enormous cost.

Providing a lower bound on value, and furthermore one that is astronomically high, is extremely useful as an eye-opener. This is a useful result for policy-makers.

A plausible lower bound would be useful, but $4B is a joke. That’s less than the annual budget of single major university (Harvard is around ~$5-6B).

Gartner says the world spent $4.5T on IT in 2022. To pick some numbers out of thin air, let’s assume half of that is on software, and half of that is on new software (not maintenance). And the let’s assume that software is sold at ~20% net margin. And open source powers an enormous fraction of it at some level, but let’s be conservative and say it’s 10%. $4.5T * 0.5 * 0.5 * 0.8 * 0.1 = $90B per year just for the new stuff.

Recreating the existing stacks… if we multiple that number by 25 years, you are at over $2T to rebuild OSS in some kind of manhattan project.

But even that is a massive underestimate. For one, it would be competing with other development objectives—there aren’t millions of principle-level engineers just sitting idle. And more importantly, formally run projects have radically different levels of passion and “giving a shit” compared to how people often start OSS.

You simply couldn’t do it at all. It would be like asking “okay, but assuming we really had to replace all the metal with wood, what would it cost to launch a manned wooden rocket ship to the moon?”

You are mis-reading the result. As quoted above:

> We then calculate the demand-side value based on a replacement value for each firm that uses the software and would need to build it internally if OSS did not exist. We estimate ... that the demand-side value is much larger at $8.8 trillion

But details like a 1000x change in estimate aside, saying it couldn't be done is not quantifiable. At least a dollar figure can be reasoned about.

Saying it can’t be done is still an actionable guide to policy. If it can’t be done any other way, and it has massive benefit, then policymakers ought to be careful to avoid actions that harm it.

For example, tax law changes requiring multi-year depreciation of engineering labor probably have an extremely detrimental effect to small open source projects with commercial potential.

The policy effectively significantly raises working capital requirements for an early stage OSS company that might be focused on services revenue instead of licensing fees.

We're missing the forest for the trees - the estimate was large ($5T), and the estimate is indeed a lower bound, and it seems like pretty damn important to save F/OSS.

> Has any business school ever produced a paper worth a damn?

The research from Fader at Wharton is pretty significant.

Spot on, and it forgets the creative aspect, it‘s like estimating the cost of reproducing all of the world‘s widely read literature. Who could recreate a Shakespeare from scatch, who a van Rossum?

nobody because the times and places either of them lived in no longer exist. surely the places and the geographical locations and buildings are still there, but the people are all different, so it's not the same place

That's important in literature in a way.. But does it matter to the economy if POSIX were created as it is or if some OS slush fund created a different computing model obsessed with some other primitve besides the file?

In our values a lot of literature is valuable because of how it came about. If Shakespeare never existed and someone wrote like him today we would just lock them up.

"We estimate the supply-side value of Shakespeare's works by estimating the cost of paying an author to write the approximately 884,000 words in his collective works. We therefore calculate the value of Shakespeare to society at $320,000, or approximately the same as the value of 3 Tesla Cybertrucks."

-- MBAs, probably

it's not about any of that "reasoning"... what matters it the conclusions: the results.

and even more than that, what matters is the capability of the paper to sway the opinion of real power.

our experience dealing with power may vary, in mine, power does not respond to "reasoning" nor any of that stuff.

nonetheless, I agree with your sentiment. why does science demand replication? IMO, a key underlying consequence is that ideas must be transferred, given away before they can be science.

the ideology of "real" human-centric science is equivalent to open source mindset. so then, my question is what to call all that research that happens, privately, in secret and under a lot of NDAs.... it is not science; that is product development.

The method that paper used was as useless as it could possibly be.

https://hachyderm.io/@hyperpape/111784908079127255

Agreed. When it first came out in January, I did a write-up and emailed Frank for comment. It wasn't until both my critique and his paper appeared together on HN for the first time that he responded ... with a total non-answer. :rolling_eyes:

https://openpath.chadwhitacre.com/2024/questioning-the-value...

https://news.ycombinator.com/item?id=39340146

https://news.ycombinator.com/item?id=39340277

That's still a terrible underestimate. Meta alone spends more than this in VR yearly with development and they are not recreating more software than the whole OSS every year.

Delving deeper

> To reproduce all widely-used OSS once (e.g., the idea of OSS still exists, but all current OSS is deleted and needs to be coded from scratch), using programmers at the average developer wage from India, it would require an investment of $1.22 billion. In contrast, if we use the average developer wage from the United States, then reproducing all widely-used OSS would require an investment of $6.22 billion. Using a pool of programmers from across the world, weighed based on the existing geographic contributions to OSS as discussed above, would lead to an investment somewhere in between the low and high-income country, $4.15 billion.

Note that they just assume that you can basically hire programmers to type that out and extrapolate from lines of code. So I'm guessing this is off by at least one order of magnitude.

Granted, I'm not sure if I have a better option, but I'd probably start with sampling OSS contributors to figure out how much time they actually devote to OSS.

Paper is here for the curious: https://www.hbs.edu/ris/Publication%20Files/24-038_51f8444f-...

> calculating the cost to recreate the most widely used OSS once

Let's not forget the new cost of taking those bajillion different implementations and making them compatible.

Does this roughly equate to a 99.9% margin? Using comparable analysis if it was a company.

The article itself starts with

> The derived FOSS surplus generates billions, if not trillions, of dollars of value for the economy

So I don't think the author is considering 4B to be the real number.

According to [1], the entire tech industry is worth 5T globally. And gas grown at about 14% per year.

IMO it's realistic that we'd be 10 years behind where we are now without open source. So that makes OSS worth 5-5/1.14^10 = $3.6T.

1: https://worldmetrics.org/tech-industry-statistics/

I do agree that the open source ecosystem seems worth more than that. But $1 per Linux install seems like a kind of arbitrary pick that might not meet our intuition, if you want to hit 4B installs.

Like, there are only ~8B people, and most of them don’t use Linux on the desktop, so we must be including other uses of Linux. Routers, IOT. I’m pretty sure my lightbulbs run Linux. Is Linux supplying $1 of value per lightbulb? I’m not sure, I suspect smart bulb manufacturers could have gone with some proprietary stack if Linux didn’t exist, and it might cost less than $1 per lightbulb… actually, I have no idea, but I don’t think $1 is an obvious lower bound.

$1 is ludicrously low as an OS licensing fee, if we're suggesting non-FOSS, proprietary alternatives.

Okay so lets say $10 for every Android cellphone that puts you at 30 billion. Not sure how you want to estimate server installs but a quick google puts forth 96% of web servers run Linux.

> Linux itself, if you value it at $1 per install is considerably more that 4 billion USD

Linux is $0.00 per install.

This is like saying you could charge for air.

It's important, but it's already free and abundant. You can't take it back and start charging for it anymore.

The value and the cost are not the same.

> This is like saying you could charge for air.

Is the value of air $0 to you?

Collectively, we spend an awful lot of resources on air. Clearly it must be of some value, otherwise we wouldn't bother. Unless it's a scam.

Sure, we're not being metered and charged by volume of air used. But someone, somewhere, is spending money to make sure it's suitable for breathing. And it's a pretty penny too.

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