Measuring the Economic Value of Open Source: A Survey and a Preliminary Analysis finds that surveyed organizations generally perceived open-source software (OSS) as worthwhile: they most often cited savings, faster development, and interoperability, while identifying security gaps, support costs, and licensing uncertainty as leading concerns. The findings are perceptions from a 2023 survey—not an audited return-on-investment calculation or a universal estimate of what OSS saves.
What the report measured
Linux Foundation Research published the 45-page report in March 2023. It was authored by Henry Chesbrough of Luiss University and the University of California, Berkeley, with a foreword by Irving Wladawsky-Berger of MIT Sloan School of Management. The study asks organizations to compare the value of using OSS with two alternatives: buying commercial software and developing the required functionality internally. It also considers ongoing support and maintenance, rather than treating software as a one-time acquisition.
The report’s central question is practical: for a particular project, what did OSS provide, what would the organization otherwise have used or built, and how did the perceived costs and benefits compare? It does not assign OSS a single market price or calculate an independently verified, universal ROI. Read the report and its methodology.
What organizations said they gained and paid
Benefits respondents rated most highly
The three leading perceived benefits were cost savings, faster development, and open standards and interoperability. Respondents also recognized benefits such as stability, security, employee motivation, access to community expertise, additional revenue opportunities, less dependence on proprietary providers, and commercial support. These are reported organizational perceptions, not proof that every OSS project delivers each benefit.
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Costs and risks respondents highlighted
The leading perceived costs were security gaps, hidden support costs, and costs associated with reducing legal uncertainty around licensing. That ranking does not establish that OSS is inherently less secure, lacks support, or carries more legal risk than proprietary software. It shows which issues these respondents considered significant when weighing their experience.
The report also recognizes adoption costs that can be easy to overlook: installation, maintenance, training, and license management. The net value therefore depends on the software chosen and the organization’s ability to support and govern its use.
How respondents compared OSS with alternatives
For a recently completed project that included OSS, respondents estimated how the cost of OSS compared with the cost of building the functionality internally or purchasing commercial code. The figures below are respondents’ judgments about their project—not audited costs or predictions for other organizations.
| Comparison for the surveyed project | Respondents who thought the alternative would cost more than OSS | Respondents who thought the alternative would cost less than OSS |
|---|---|---|
| Developing the functionality in-house | 67% (Linux Foundation Research, 2023) | 21% (Linux Foundation Research, 2023) |
| Purchasing commercial code | 75% (Linux Foundation Research, 2023) | 13% (Linux Foundation Research, 2023) |
The report’s comparison includes more than the initial code: the commercial alternative could include installation, service, and support, while the in-house alternative includes development and maintenance. The percentages indicate how respondents viewed the alternatives for their selected project; they do not mean that OSS will always be cheaper than buying or building.
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Did benefits outweigh costs?
Almost two-thirds of surveyed organizations said OSS benefits exceeded costs, while about one-fifth said costs exceeded benefits. About half said the benefit-to-cost ratio had improved over the previous five years; the Linux Foundation’s March 2, 2023 release reported that 16% felt it was declining. The report presents those figures as responses from its survey population, not as evidence that OSS adoption caused a change in costs or benefits. The Linux Foundation release summarizes the findings.
Who was surveyed—and what the results cannot show
The survey received 431 responses and targeted CEOs and CTOs/CIOs at Fortune 500 companies. Thirty-eight percent of respondents held CEO or CTO/CIO roles; other respondents included research and development and business or marketing staff. Forty-three percent of surveyed organizations had annual revenue above $1 billion, meaning most were below that threshold. The sample included many large firms, but it should not be treated as a representative census of all companies.
To anchor detailed estimates, respondents were asked about a major recently completed project that used OSS. The report acknowledges that treating one selected project as a proxy for other projects may not capture an organization’s full experience. Its findings are perceptions collected for a 2023 report and cannot establish what OSS economics look like for every organization today.
The report also describes limits to quantifying software’s economic impact. In the foreword, Wladawsky-Berger cautions that executive responses to such questions may be vague and qualitative, and that proper methods for measuring software’s broader impact on productivity and the economy remain lacking. The survey does not measure wider social value, such as other firms’ ability to use shared repositories, and may miss strategic value from influencing the direction of technologies an organization depends on.
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How a company can apply the findings
The report is most useful as a checklist for assessing a specific project—not as a promise of savings. Compare OSS with the realistic alternatives over the software’s expected life, and include costs and capabilities that do not appear in a purchase price.
- Define the project and alternatives. Identify the functionality needed and compare a specific OSS option with a commercial product and internal development. Include implementation, service, support, and maintenance in the comparison.
- Estimate total cost over time. Account for installation, training, ongoing support, maintenance, upgrades, and license management—not just the initial price or the time needed to write code.
- Assess speed and staffing. Ask whether using existing OSS can help the team deliver sooner, and whether the organization has the people and expertise to operate and maintain it.
- Plan security and licensing governance. Identify how the organization will assess security, track dependencies, review licenses, and address uncertainty. The report identifies these as concerns to manage, not automatic reasons to reject OSS.
- Consider interoperability and supplier dependence. Evaluate whether open standards improve integration or reduce reliance on a proprietary provider for this particular system.
- Factor in experience and participation. An organization new to OSS may face startup costs. The report suggests that contributing actively can help organizations shape technology they rely on, although the value of doing so depends on their goals and capacity.
These comparisons should use the organization’s own project requirements and cost estimates. The survey supports the idea that OSS can create economic value; it does not supply a formula that determines the outcome for a particular deployment.
Bottom line
The 2023 Linux Foundation Research report records broadly positive perceptions of OSS value among its respondents, especially around cost, speed, and interoperability. It also makes clear why the result is conditional: security, support, licensing, and organizational capability affect the balance, and the reported figures are estimates rather than audited or universal economics.
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