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Economic Impact of Open Source on Small Business: A Case Study by Mike Hendrickson, Tim O'Reilly, Roger Magoulas

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Chapter 2. Introduction

By most traditional measures, pure-play open source companies appear to have had a relatively modest economic impact. Red Hat, the largest open source software company, had revenues of $1.13 billion for the fiscal year ending February 29, 2012, and a market capitalization of $10.8 billion as of June 2012. MySQL was sold for $1 billion to Sun Microsystems in 2008. After the sale of Sun to Oracle, MySQL has estimated revenues in the range of $171 million, and MySQL ecosystem revenue is expected to grow at a CAGR of 40% to reach $664 million by 2015 [1]. There are many smaller companies that directly monetize open source software programs, but none have achieved the scale of either of these market leaders.

Yet there is no question that open source software has had a profound economic impact that belies these numbers. Companies like Google, Amazon, Facebook, and Twitter are built on open source platforms. All of them run on Linux, make heavy use of open source databases and languages, and contribute to the open source communities they rely on. They have built a proprietary layer on top of the open source stack, analogous to the way Microsoft builds applications on top of Windows, or Apple creates operating systems and applications for its various devices from a common platform. Even Apple bases many of its platforms and products on open source software and offers many Open Source languages, databases and other tools for developers.

And the economic impact is clear: ...

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