Fedora 9 Would Cost $10.8B To Build From Scratch

ruphus13 writes "The Linux Foundation's recently released report claims, '... it would take approximately $10.8 billion to build the Linux community distribution Fedora 9 in today's dollars with today's software development costs.' The article states why this might actually understate the value of the distros, though, since it doesn't include the power of the brand and the goodwill value. 'There were several approaches that the Linux Foundation employed to reach the $10.8 billion dollar figure, including calculating the number of lines of code in Fedora 9 (204,500,946), and using an average programmer's salary of $75,662.08 — as determined by the US Department of Labor — to measure development costs ... On the balance sheets of Coca Cola and many other huge corporations, you find goodwill listed as a major asset.'"

Oh yeah? Guess what Microsoft can do!

They can spend twice that much money and only deliver a tenth of the functionality! That's a win! I think.

Uh, Goofy Accounting

Goodwill only shows up on the balance sheet when an acquisition or some similar event occurs which creates a discrepancy between the purchase amount and the balance sheet of the acquisition.

You don't just make up a number and add it onto your balance sheet.

Re:Uh, Goofy Accounting

You don't just make up a number and add it onto your balance sheet.

And THAT is why I failed my economics class. My teacher never did appreciate my 'creativity'. I would simply explain that I wanted to be a CEO someday.

Re:Uh, Goofy Accounting

You don't just make up a number and add it onto your balance sheet.

And THAT is why I failed my economics class. My teacher never did appreciate my 'creativity'. I would simply explain that I wanted to be a CEO someday.

Economics does not use Balance Sheets, that would be your Accounting course. Perhaps that is why you failed?

Re:What is a trademark's value called?

"Goodwill" is a specific subset of "intangible assets". Other items such as patents, copyrights, trademarks or other contractually transferable rights or privileges would be in the same category, but are not "goodwill", which has a specific meaning in accounting.

Re:What is a trademark's value called?

Uh, Goodwill is the correct term.

Has GP looked at GE's balance sheet? [ge.com]

GE claims $4.5 billion in "Licenses, Patents, and Trademarks". While the GP is correct that these values primarily arise as a function of acquisitions or sale of assets, the only time that corporate evaluations really matter is during acquisitions, sale of assets, and other forms of stock/ownership valuations.

Let me put it the way GE puts it (and GE is the *gold standard* when it comes to Goodwill, except for perhaps the Federal Reserve, who has a totally invented balance sheet.) There are 9 companies with triple A credit ratings, and GE's ability to manage accurately manage goodwill is one of the reasons it is a triple A rated company.

Upon closing an acquisition, we estimate the fair values of assets and liabilities acquired and consolidate the acquisition as quickly as possible. Given the time it takes to obtain pertinent information to finalize the acquired companyâ(TM)s balance sheet, then to adjust the acquired companyâ(TM)s accounting policies, procedures, books and records to our standards, it is often several quarters before we are able to finalize those initial fair value estimates. Accordingly, it is not uncommon for our initial estimates to be subsequently revised.
Emphasis added for the benefit of readers.

You *do* just stick those things on your balance sheet; the issue is being able to justify them. If I put my good name on a financial statement to a bank, the bank probably won't take me seriously, unless my name is something like "Warren Buffet". If my name is "GE", and I "give" that name to some business effort, it is a very serious transaction with serious financial consequences, and I can potentially use that to either buy or sell assets, as well as finance offers, and issue debt.

The credibility of the "good will", and the managers who evaluate the relevant values is what determines the financial values of those intangibles. They're only intangible in that they are intellectual concepts, and in many ways are just as "real" as stock or other corporate paper holdings.

Paying programmers by lines of code...

...is like paying airplane manufacturers by weight.

Erm!

[...]to build the Linux community distribution Fedora 9 in today's dollars[...]

I'd rather build it in C with a modest compiler.

Wow, goodwill is an asset?

I wonder if I can spend some of my karma down at Taco Bell for a burrito?

Re:

Nope... but the Phillies got you a free taco last night!

Re:Wow, goodwill is an asset?

No, but when you die you will be reborn at Taco Bell *as* a burrito.
That's karma!

How much money did MS spend on Vista?

According to an Inquirer article, the estimates were about $10 billion [theinquirer.net].

I would think it would cost more than $10.8 billion to develop FC9 from scratch then...since it's a better OS.

Only $427.33 on eLance

I bet if you put the specs on eLance, there'd be a company in Romania somewhere bidding to do it for about $427.33, give or take a few dollars :)

Lines =! quality =! true cost

Thats not a fair comparisons of cost.

Especially since you are comparing lines of code in OSS to lines of code in CSS, Its like comparing 2 fruits, they are close, but not the same.

Imagine...

Ten billion for an operating system... am I the only one thinking that the money we spend on military adventures and bailing out Wall Street would be better spent funding the creation and development of open source software?

Re:Imagine...

I'm not in the military, so I'm speaking out of my ass here.

The last time I checked, you couldn't stop a suicide bomber by throwing a copy of Fedora 9 at them.

Re:Imagine...

Actually, I tried this last week, turns out he turned into a communist and dropped the religion thing. So, you, sir, are incorrect.

But it wouldn't

Fedora contains a lot of redundancy. throwing in several text editors makes sense if they're already there and free, but you wouldn't rewrite emacs, joe, Vim and nano. You wouldn't rewrite Epiphany, if you'd rewritten Firefox.

The number's a lot bigger than it needs to be.

Re:But it wouldn't

Sure you would have "re-written" things.

Windows has/had 3 major competiting brands of office
productivity software.

Perhaps it wouldn't have all be developed by the same
company, but the products themselves would have been
developed. This just highlights the fact that a Linux
distro is no so much just an analog for a copy of
Windows but it also includes a freeware/commercial
equivalent of a Simtel or Tucows archive DVD.

This also exposes the real problem of competing with
Windows or MS-DOS if you are an alternative OS. You
not only have to compete with the core OS you also
have to compete with all of the 3rd party apps.

I'd be curious what the proposed dollar value of the
entire Ubuntu software repository "multiverse" would
be.

"Good will" does not mean what you think it means

> On the balance sheets of Coca Cola and many other huge corporations, you find goodwill
> listed as a major asset.

"Good will" is a specialized accounting term when used on balance sheets.

Re:Average salary?

Perhaps you should consider working on something other than an open source project :)

Re:Average salary?

You make $3.78/hr ?

Where I live people who make $75k have to live in an apartment, and it is unlikely they will be approved for a home loan without at least 30% down (around $150k). If you save aggressively on that sort of salary it should only take about 5-7 years to scrap together enough money for your down payment. Once you have the house, I'm not sure how you pay the mortgage (roughly $3k/month).

For you it will take closer to 70 years.

Re:Average salary?

In America, homeownership, like college, is a capitalist trap designed to force you into lifelong slavery. Fuck the house, own your life.

Re:

This coupled with his salary tends to make me think his job market is similar to the one when I first got out of school. Employers are looking for ways to make the employees feel their below average salaries are really average salaries. I applied several times for an entry level job that sat open on a particular company's website for a year and a half, I had been doing everything in the req except for ADA academically for years but not even a call. The "we would rather not hire anyone than fill an open j

Re:I'd rather see...

RTFA. It said $1.4b for the kernel alone.