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December 4, 2006

Linux grabs 75% of all open source investment

The Linux operating system is the recipient of 75% of all vendor investment in open source software, according to a new report from the Harvard Business School, which also indicates that vendor support for open source is primarily motivated by boosting their proprietary offerings.

By CBR Staff Writer

The preliminary draft report suggests that $2bn was invested by vendors in open source software between 1995 and 2005, with $1.5bn plowed into Linux, $317m into the Firefox browser, $76m into the productivity suite and $48m into the MySQL database.

The only other projects to receive significant vendor backing, according to the study, were the PHP scripting language with $24m, the Tcl scripting language with $15m, and the JBoss middleware stack with $10m.

Although numerous investments since 2005 would change the picture, and the Eclipse tools project appears to be a notable omission, the research indicates that the vast majority of vendor investment in open source has been placed in Linux, and that vendors are clearly looking for a return on their investments.

If vendors were altruistically motivated to contribute to OSS projects, we would expect to see an even distribution of investments across projects, noted the reports authors: Marco Iansiti, professor of business administration at the Harvard Business School, and Gregory Richards, managing director of Keystone Strategy Inc.

Their research indicates that most investments in open source software are driven by economic motives and are complementary to proprietary software, hardware and service portfolios, something that many industry watchers would have predicted to be the case.

To calculate the investment levels, the researchers looked at direct financial contributions and venture capital funding, as well as putting a value on developer hours for ongoing development and contributed code. Customer contributions, volunteer time, and investments from individuals and non-profit organizations were excluded.

The report also suggests a new metric for assessing the impact of an open source project by multiplying weekly distributions by the size of the installation file (representing problem complexity) to calculate the installation rate. Linux had an installation rate of 204 terabytes per week, 27, MySQL 15, Firefox 12, and JBoss 3.

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