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Floss Impact : a study about the economic impact of Open Source software

by xavier last modified 2009-05-09 18:06

The European Commission has released a study about the economic impact of Free/Libre or Open Source Software (FLOSS) on the European ICT sector. In the Flossimpact report, Zea Partners is presented as an innovative business model part of a thriving new economic ecosystem.

The Flossimpact report was prepared by a consortium of research institutions led by academics at the United Nations University in Maastricht (UNU-MERIT), Netherlands.

"Our findings show that, in almost all cases, a transition toward open source (produces) savings in the long-term cost of ownership," said the report.

Looking at the impact of FLOSS on European competitiveness in ICTs, the study finds that such software is of great importance to the digital industry in Europe and several other parts of the world. It has already reached considerable market share in several fields, including web servers and operating systems. A large share of public and private sector organisations use at least some FLOSS.

Findings include:

  • FLOSS applications are top rung products in terms of market share in several markets.
  • The existing base of quality FLOSS applications with reasonable quality control and distribution would cost firms almost Euro 12 billion to reproduce internally. This code base has been doubling every 18­24 months over the past eight years.
  • The notional value of Europe’s investment in FLOSS software today is Euro 22 billion (36 billion in the US) representing 20.5% of total software investment (20% in the US)
  • While the US has an edge in large FLOSS­related businesses, Europe is the leading region in terms of globally active FLOSS software developers, and leads in terms of global project leaders, followed closely by North America. Asia and Latin America face disadvantages at least partly due to language barriers, but may have an increasing share of developers active in local communities.
  • By providing a skills development environment valued by employers and retaining a greater share of value addition locally, FLOSS can encourage the creation of SMEs and jobs.
  • Defined broadly, FLOSS­related services could reach a 32% share of all IT services by 2010, and the FLOSS­related share of the economy could reach 4% of European GDP by 2010.
  • The open-source-related economy (firms that contribute to open-source development) represents 565,000 jobs and €263 billion in annual revenues.
  • Though FLOSS provides ample opportunities for Europe, it is threatened by increasing moves in some policy circles to support regulation that seeks to protect old business models of creative industries, making it harder to develop new ways of doing business.

The study, which also provides policy recommendations, was commissioned by the European  Commission's Directorate General for Enterprise and Industry. The views expressed in the study are those of its authors and do not necessarily represent the views of the European Commission.


Source and contacts :

UNU Merit Flossimpact Press Release

Download Flossimpact report (1,8Mb)

Slides : Rishab Ghosh presenting the Flossimpact study