Valuing Open Source software

From Slashdot:

“The Linux kernel would cost more than one billion EUR (about 1.4 billion USD) to develop in European Union. This is the estimate made by researchers from University of Oviedo (Spain), whereby the value annually added to this product was about 100 million EUR between 2005 and 2007 and 225 million EUR in 2008. Estimated 2008 result is comparable to 4% and 12% of Microsoft’s and Google’s R&D expenses on whole company products. Cost model ‘Intermediate COCOMO81’ is used according to parametric estimations by David Wheeler. An average annual base salary for a developer of 31,040 EUR was estimated from the EUROSTAT. Previously, similar works had been done by several authors estimating Red Hat, Debian, and Fedora distributions. The cost estimation is not of itself important, but it is an important means to and end: that commons-based innovation must receive a higher level of official recognition that would set it as an alternative to decision-makers. Ideally, legal and regulatory framework must allow companies participating on commons-based R&D to generate intangible assets for their contribution to successful projects. Otherwise, expenses must have an equitable tax treatment as a donation to social welfare.”

Thanks to Glyn Moody for spotting it.