Are enterprises saving $26 million per project with open source? Not exactly

But vendors and companies can benefit by using open source to complement their development budget

Checking my Twitter feed before heading to bed, I noticed that Dana Blankenhorn had posted a story titled "Enterprises saving $26 million per project with open source." There had to be a mistake in the title, right? I read on diligently. Dana writes:

A Black Duck analysis shows the average enterprise software project is 22% open source, saving an average of $26 million on each project.

Those figures would, as written, suggest that the average enterprise software project costs $119 million.0

[ Also on InfoWorld, Savio Rodrigues suggests there's more than one way to measure the bottom line in "Open source vendors should focus on value and price" | Stay up to speed with the open source community via InfoWorld's Technology: Open Source newsletter. ]

So I went back to the original press release from Black Duck, which states:

Black Duck surveyed over 175 customers that used open source software in hundreds of development projects over the past 18 months. The results revealed that an average product or application contains almost 700MB of code, 22 percent of which is open source software....

Using the COnstructive COst MOdel (COCOMO) technique, Black Duck estimates the cost of developing the 22 percent of open source software used by companies in the study sample at approximately $26 million per product or application.

When you consider that Black Duck's customer base is skewed toward software vendors, these results make complete sense. The fact that commercial software vendors use open source within their commercial product is well established.

The study doesn't report the type of functionality delivered by the 22 percent of open source code represented in the final product. Was it functionality that would differentiate vendor A's product from vendor B's product? Or was it functionality that was considered a commodity? I'll wager it was the latter. Why would a vendor spend valuable and scarce development resources on building undifferentiated capability when a perfectly suitable alternative is available in an open source project? Rather, a savvy vendor would spend their development resources on building differentiating capability.

I've spoken about vendors, but enterprise companies should not be expected to act much differently -- well, at least enterprises savvy enough to use open source within their development process and mange that use with the help of Black Duck.

Follow me on Twitter: SavioRodrigues.

p.s.: I should state: "The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."

This story, "Are enterprises saving $26 million per project with open source? Not exactly," was originally published at InfoWorld.com. Follow the latest developments in open source at InfoWorld.com.

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