What's Linux worth? The question has been a favorite of technology groups and cocktail party conversations ever since a character named Jeff V. Merkey offered $50,000 for a copy of Linux. The offer was a ploy. Merkey wanted it under the BSD license, which would have undermined the terms of the GPL. So he didn't get it. But we know, at least, that $50,000 proved to be a low bid.
How would you set a value on Linux? It's widely used in highly competitive businesses, such as Travelocity, Google (NSDQ: GOOG), Amadeus, Amazon (NSDQ: AMZN). It's used by start-ups. It's used by individual developers and in mainstream business.
Hungarian kernel developer Ingo Molnar in 2004 estimated it would cost $176 million to redevelop the 2.6 Linux kernel from scratch with paid programmers. The average salary, he estimated, would be $56,286, too low by today's standards. I don't know how many developers he figured would be needed, but his target kernel had 4.3 million lines of code.
David A. Wheeler, a northern Virginia author on Linux security, looked at Ingo's calculations when they came out and decided they were too low. He came up with a $612 million estimate because operating systems are so much harder to develop than applications. They contain many moving parts and the parts must all work together.
He said in an update to his calculations in 2006 that if the Linux kernel ever reached 6.6 million lines of code, it would be worth more than $1 billion in terms of equivalent, commercial development costs.
Well, the 2.6.23 kernel came out Oct. 9, and it contained a total 8.58 million lines, counting all its files, according to Jonathan Corbet, kernel developer and author of the forecast reports published by the Linux Foundation. Using the stricter methodology imposed by Wheeler, the count comes to 5.5 millions lines, Corbet says.
The kernel development process is adding 2,000 lines of code a day or roughly another 160,000 by the end of 2007. By the end of 2008, it will have added another 730,000. So the kernel will have close to 6.4 millions lines of code, using Wheeler's methodology, at the end of next year. Sometime during the first 100 days of 2009, Linux will cross the 6.6 million lines of code mark and $1 billion in value.
Linux is free, of course, and will remain free because it is GPL open source code. I make this projection because the kernel development process, which keeps improving Linux, is one of the hidden treasures of the modern world. It keeps adding value at a pace that no other open source project can match. It's done so for 16 years and shows no signs of letting up. If anything, it's accelerating.