Open-source software can save organizations money, speed development and make it easier to work across systems—but it is not automatically free to adopt or maintain. A Linux Foundation Research report published in March 2023 surveyed 431 respondents and found that most said the benefits of open-source software (OSS) exceeded its costs. Those are organizational perceptions, not audited savings or a universal return-on-investment figure.
What the report measures
Linux Foundation Research’s March 2023 report, Measuring the Economic Value of Open Source: A Survey and a Preliminary Analysis, examines how organizations perceive the costs and benefits of adopting OSS. It does not assign open source a single market price or calculate a universal ROI.
The study asks organizations to compare OSS with two alternatives: buying commercial software and building the needed functionality internally. The comparison includes ongoing support and maintenance, not just the initial cost of obtaining code. The report also recognizes costs related to installation, training and licensing management.
What organizations said they gained—and what concerned them
Top perceived benefits
Respondents most often rated cost savings, faster development and open standards or interoperability among the leading benefits of OSS. The report also lists security, stability, employee motivation, community expertise, possible revenue opportunities, independence from proprietary providers and commercial support as benefits respondents considered.
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Top perceived costs
The leading reported concerns were security gaps, hidden support costs and the expense of reducing uncertainty around licensing. These are respondents’ perceptions of the costs they face; they do not establish that OSS is inherently less secure, unsupported or legally riskier than proprietary software.
How respondents compared OSS with alternatives
For a recently completed project involving OSS, respondents estimated whether the functionality would have cost more or less through internal development or a commercial purchase. The figures below are estimates from those respondents, not audited project accounts.
| Alternative compared with OSS | Respondents’ estimate |
|---|---|
| Build and maintain the functionality in-house | 67% said it would have cost more than using OSS; 21% said it would have cost less. Linux Foundation Research survey, 2023. |
| Purchase commercial code | 75% said it would have cost more than using OSS; 13% said it would have cost less. Linux Foundation Research survey, 2023. |
The estimates reflect the projects and judgments respondents described. They should not be read as a forecast that OSS will always be cheaper than buying software or developing it internally.
Did benefits outweigh costs?
Almost two-thirds of surveyed organizations said OSS benefits exceeded its costs, while about one-fifth said costs exceeded benefits. About half said their benefit-cost ratio had improved over the preceding five years; the Linux Foundation’s March 2, 2023 release reported that 16% felt the ratio was declining. These results describe respondents’ assessments at the time of the survey, not a current measurement of every organization’s experience.
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The report’s interpretation is conditional: savings, faster development and reduced dependence on a proprietary supplier can add value, but the balance depends on how an organization adopts and manages OSS. Less experienced organizations may still be taking on startup costs. The report also suggests that contributing to projects can help organizations shape technology on which they depend.
Who was surveyed—and what the results cannot prove
The survey received 431 responses. It targeted CEOs and CTOs/CIOs at Fortune 500 companies, but only 38% of respondents held those roles; others included R&D and business or marketing staff. About 43% of surveyed organizations had annual revenue above $1 billion. The sample therefore leaned toward large firms, but it is not a representative census of all businesses.
To make cost estimates concrete, respondents were asked to anchor answers to a major recently completed project that included OSS. The report acknowledges that the chosen project may not represent other projects at the organization. Its findings are perceptions rather than audited cost data, and they do not prove OSS caused the benefits respondents reported.
The study also does not capture all possible value. It excludes broader social value from other firms’ ability to use shared repositories and may omit strategic value from influencing the direction of critical technologies. In the report’s foreword, Irving Wladawsky-Berger cautions that executive answers about economic value can be vague and qualitative, reflecting a wider difficulty in measuring software’s effect on productivity and the economy.
Best Value
How to assess OSS economics at your organization
For a company deciding whether to adopt OSS, the report’s comparison is a useful framework—not a substitute for project-specific estimates. Compare the alternatives over the expected life of the software, using the same assumptions for each.
- Total cost over time: Include installation, training, support, maintenance, upgrades and licensing management, alongside any purchase or development costs.
- Development speed and staffing: Estimate how quickly each option can deliver the required functionality and whether your team has the capacity to build and maintain it.
- Security and licensing governance: Account for the people and processes needed to evaluate security, manage dependencies and address licensing obligations.
- Interoperability and supplier dependence: Consider whether open standards make it easier to work across systems and how much an option ties you to one proprietary supplier.
- Organizational experience and contribution: Factor in whether your team already knows how to use and maintain OSS, and whether contributing upstream is realistic for the technology you rely on.
For each option, document both expected costs and benefits, then revisit the estimates as actual support needs and maintenance work become clearer. That makes a local decision more useful than applying survey averages to a project with different requirements.
Quick Recap
Sources and date
- Linux Foundation Research, report landing page.
- Linux Foundation Research, Measuring the Economic Value of Open Source: A Survey and a Preliminary Analysis (March 2023).
- The Linux Foundation, “Linux Foundation Research Shows Economic Value of Open Source Software Rising in Terms of Benefits vs. Costs” (March 2, 2023).
- The Linux Foundation, “The value of open source software is more than cost savings” (March 7, 2023).
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