Three blogs deep, there's a link to the actual paper.[1] It's a study of one project, a geospatial database:<p><i>"Starting in 2009, the Global Facility for Disaster Reduction and Recovery (GFDRR) and its partners developed GeoNode: web-based, open source software that enables organizations to easily create catalogs of geospatial data, and that allows users to access, share, and visualize that data. Today, GeoNode is a public good relied on by hundreds of organizations around the world ...
GFDRR’s direct and in-kind investment in GeoNode over the past six and a half years has been in the range of $1.0–$1.5 million USD. Partners have also made significant investments in GeoNode; a conservative estimate of these partner investments comes to approximately $2 million USD over the same time period.
GFDRR’s investment in GeoNode would be a reasonable amount even viewed strictly as a software development cost: the GeoNode software today represents an approximately 200% return on investment in terms of code written, since thh current GeoNode project would most likely have cost $2.0 – 3.0 million USD if GFDRR had produced it alone as proprietary software, without building an open source community around the codebase."</i><p>This is an unusual situation; many people need geospatial databases, and contributing their local data is useful to them. The value here is in the data, not the code. This is more like Open Street Map than a software package.<p>[1] <a href="https://opendri.org/wp-content/uploads/2017/03/OpenDRI-and-GeoNode-a-Case-Study-on-Institutional-Investments-in-Open-Source.pdf" rel="nofollow">https://opendri.org/wp-content/uploads/2017/03/OpenDRI-and-G...</a>
On the other hand, what's the average ROI on investing in proprietary software development? It's rarely a question of spending the resources on software development, it's do we spend the resources in an open, or closed way? Nice to see a positive ROI, though - there's definitely a fear that it's just "giving stuff away" and clearly it's not that simple.<p>I'm all about open-source, but I wish people wouldn't focus on how companies should do it because it's good for them financially (although granted that's probably more effective with the intended audience than what I would say). I wish a bigger deal was made about how it's just a douche bag move to sell software and proactively prevent users from having freedom to understand, fix or modify it for their needs - that applies to more than just the source availability and license.
A good example of the ROI of Open Source is the OpenEMR project. That free system replaces multi-hundred thousand dollar hospital systems from companies like Cerner. I used to work at Oracle, and when I found out about OpenEMR I remember thinking "this makes the price difference between Oracle Enterprise Edition and MySQL Community look trivial".<p>A lot of times I hear the implementation cost is where all the money is so it doesn't matter what the software costs. That is sort of true, but large companies are not incentivized to make it any easier to implement, less they put their System Integrators out of business and/or push them to other vendors. The Open Source community does not have this incentive obviously.<p>EDIT: <a href="https://en.m.wikipedia.org/wiki/OpenEMR" rel="nofollow">https://en.m.wikipedia.org/wiki/OpenEMR</a>
Good case study on one successful open source project. Shouldn't be used to draw any broader conclusions about impact of open source on any company's biz model. Some portions of typical software stacks are amenable to open source biz models (such as general purpose server OS), while many others are not.<p>Note that the study does not actually measure ROI from a revenue perspective, but estimates based on theoretical saved costs: The company invested $1M in open source infrastructure and potentially saved $2M in direct development costs (given that the code base is current worth $3M). [1]<p>Most interesting takeaway for me is the implications of open source for government funded projects, and a ratification of the idea that contributions of code for some public tool can save the general public tax money. A forward thinking org could try to broker some sort of tax cut based on SLOC contributed to public, government-sponsored projects? Maybe that already exists.<p>Would suggest studying Red Hat's rise to $2B in yearly revenue to understand how a company takes open source and turns it into revenue.<p>[1] <i>GFDRR’s direct and in-kind investment in GeoNode over the past six and a half years has been in the range of $1.0–$1.5 million USD...GFDRR’s investment in GeoNode would be a reasonable amount even viewed strictly as a software development cost: the GeoNode software today represents an approximately 200% return on investment in terms of code written, since the current GeoNode project would most likely have cost $2.0–3.0 million USD if GFDRR had produced it alone as proprietary software, without building an open source community around the codebase.</i>
I haven't had time to read the report in detail, but it appears that the 200% ROI figure is simply derived from the ratio of externally written software to internally written software. So, by writing an open source tool instead of keeping it closed, they got contributions of code that exceeded their own investment. However, this is not actually the main point of the paper, and neither is it the whole picture. For example they discuss sponsoring in-person events and I don't think that kind of cost is accounted for in their ROI figure. Indeed, the paper goes to some effort to explain that the benefit they received goes far beyond the outside contributions of code. I know nothing of the project, but from their description it seems that it was very well run. I'm not sure that we can reasonably assume that they wouldn't get similar results from a well run consortium, for example.<p>Anyway, it looks like an interesting report and I look forward to reading it in more detail, but I think the headline in the blog-pointer is unwarranted.
Most people receive infinite return because they invest nothing.<p>A more meaningful measure is how <i>quickly</i> you can resolve a problem with open-source for X amount of investment, versus other options. With that, if a package doesn't do what you want then investing <i>nothing</i> appropriately yields NO return; whereas, investing certain amounts of time (asking questions, filing bugs, etc.) may yield more return, and fixing it yourself may yield the most.
Mods, can we change the title to that of the source report? "OpenDRI & GeoNode: A Case Study for Institutional Investments in Open Source."<p>The current title, "World Bank-Sponsored Report Shows 200% ROI on Open Source Participation," the contents of this link, and even the World Bank's own blog's title, strongly suggest that this was a World Bank-commissioned study across multiple open-source projects/communities. Note the plural in OP: "to quantify the benefit of contributing to and participating in open source communities." And the World Bank's blog title: "Leveraging Open Source as a Public Institution — New analysis reveals significant returns on investment in open source technologies."<p>But that's not the case at all. As noted in other comments, this is a single community, a single project. Granted, it's a successful one. But we shouldn't get our hopes up about "oh s<i></i>*, this is an article I can forward to the C-suite to get us to invest in open source!" What we have here is technically accurate clickbait that relies on the brand of the World Bank's analysis. And, in being disappointingly vague, it tarnishes that brand.
Link references link:<p><a href="https://blogs.worldbank.org/opendata/leveraging-open-source-public-institution-new-analysis-reveals-significant-returns-investment-open" rel="nofollow">https://blogs.worldbank.org/opendata/leveraging-open-source-...</a><p>Which references link:<p><a href="https://opendri.org/resource/opendri-geonode-a-case-study-for-institutional-investments-in-open-source/" rel="nofollow">https://opendri.org/resource/opendri-geonode-a-case-study-fo...</a><p>Which references PDF:<p><a href="https://opendri.org/wp-content/uploads/2017/03/OpenDRI-and-GeoNode-a-Case-Study-on-Institutional-Investments-in-Open-Source.pdf" rel="nofollow">https://opendri.org/wp-content/uploads/2017/03/OpenDRI-and-G...</a><p>Titled:<p><pre><code> OPEN DATA FOR RESILIENCE INITIATIVE & GEONODE
A CASE STUDY ON INSTITUTIONAL INVESTMENTS IN OPEN SOURCE</code></pre>