FW: 100% of yesterday's second sealed

[Rasjid Wilcox]

On Fri, 15 Nov 2002 8:20 am, RWare at INTERPLASTIC.com wrote:
> How much has the open source community donated in dollars?

This is a very misleading question.  It assumes that dollars are the only 
thing worth donating, and that how the dollars were gained is not important.  
In calculating the net gain to the community of a 'donation' by a company, 
one has to consider the cost to the community incurred by the company earning 
that money in the first place.

Lets take a non-computing example.  Suppose that BHP makes $1 billion, and 
donates $10 million to help clean up the environment.  (Landcare or the ACF 
or TWS or Greenpeace or whatever).  Is this donation a 'net gain' to the 
society or the environment??  If BHP was a totally 'clean' company, and 
caused no environmental damage, then the answer would be yes.

However, suppose that in the course of making its $1 billion, BHP causes $100 
million worth of environmental damage.  Then even though 'on paper' BHP has 
made a significant donation ($10 million), there is still a 'net loss' of $90 
million incurred by the (global) society through the activities of BHP.

One could reasonably argue that the value of software is its *fair* market 
value.  For the 01-02 financial year, Microsoft had revenue of US$28 billion.  
Even is we assume that their software is only 10% overpriced because of their 
monopoly position, that is a cost to the global community of (at least) 
US$2.8 billion.  And that is just for the last financial year, and only 
assuming 10% overpricing.  I more realistic figure might be that Microsoft 
software is overpriced by about 30%, giving a net loss to the global 
community of around US$10 billion last year.  Until Microsoft has more than 
paid its debt to the community (looking at revenue of the last few years, at 
least US$10 billion, probably more) I remain completely unimpressed.

How does one value the software contribution made by the open source 
community?  That is actually quite difficult.  At the very least, it would be 
the market value of the person-hours put into creating it.  Anyone seen an 
estimate of the total person hours put into creating OSS?  My guess is that 
valuing OSS 'at cost' would represent a 'donation' to society of at least 
several $100 million.

However, this understates the real value, since
a) we are only valuing at cost, not the *fair* market value, and
b) the vast majority of OSS is also a gift in perpetuity.
One could argue that the true 'gift value' of OSS would be to take the Net 
Present Value of the 'Fair Market Value' (if developed in an closed source 
proprietary manner) of all OSS across all present and *future* users.  Of 
course, this is impossible to know for certain.  However, if we assume that 
the use of OSS keeps growing in the current manner, the total gift value to 
society of OSS is probably already into the billions of dollars (taking the 
NPV of 'ongoing' nature of the gift).

So the way I see it:
Microsoft - net *cost* the the community - tens of billions of dollars (due to 
monopoly pricing etc)
OSS - net *gift* to the community - at least hundreds of millions of dollars 
worth of software development, and possibly billions of dollars if taking 
into account the 'in perpetuity' nature of the gift.

Call me a zealot, but in my mind there is little question which has 'donated' 
more.

Rasjid.