Glyn Moody reports on a financial estimate of the value of open source software projects in terms of their code.

You can find the technical details of the methodology, in his article. The full paper of the Linux Foundation is here.

Here are some of the astounding results:

we estimate that it would take approximately $10.8 billion to build the Fedora 9 distribution in today’s dollars, with today’s software development costs. Additionally, it would take $1.4 billion to develop the Linux kernel alone.

Glyn Moody comments on the importance of these results:

“Now, it is easy to quibble with the details and the result, but the important thing is that this study establishes a scale: we’re not talking about millions of pounds, even tens of hundreds of millions of pounds, but probably billions to tens of billions. That’s some gift to the world. It also represents a very real saving to the companies that use GNU/Linux – indeed, the global savings are likely to be several times the nominal cost of development, even on a conservative basis.”

Against this background, Moody concludes that no proprietary company can hope to emulate this kind of investment, marking the beginning of the end of these types of internal R&D focused strategies.

This is confirmed by a recent statement by Steve Ballmer, that Vista 7 is the last great development effort for a Microsoft operating system, it’s the end of the line.