The 8.8 trillion dollar value of open source software

In this Upstream fireside chat, Tidelift co-founder and general counsel Luis Villa sits down with Frank Nagle, assistant professor in the Strategy Unit at Harvard Business School, to discuss the recent paper called The Value of Open Source Software that Frank co-authored. This paper concluded that open source is worth $8.8 trillion dollars. In this clip, Frank discusses the finding.
Watch the full talk here: explore.tidelift.com/upstream...
Transcript:
So you're an author, along with two other scholars, on a recent analysis of open source suggesting that the value of open source is $8.8 trillion. I just want to sit with that number a little bit, because I've talked to a lot of people about your paper, and I have to keep correcting people because they hear it, but their brain registers “billion.” So they say back like, oh, yeah, 8 billion, that sounds like a lot. No, no, no 8 trillion, which sounds like even more. I want to start simply by saying, Did the size of this number surprise you? Or did you have some sense of the order of magnitude when you started to work?
Yeah, it definitely did, because we were expecting something in the billions and ended up with something in the trillions, much like the people you talk to. Our first reaction was, this can't be right, we must have done something wrong, let's go and check. We looked into, like any research, we're making some assumptions and we played with those-but what we came to understand and highlight in part of the paper, is that we think about this as the total global spend on software. It's only really, three, four times more than that, right? And then when you pair that with the fact that some code bases of paid software are 90 plus percent made up of open source, then you can start to think that this is actually a plausible number. And when we think about everyone who's using open source out there, and how they're using it, and the value that they're getting from it, it starts to sound like more of a plausible number than perhaps the initial kind of gut check of trillions of dollars worth of value.