Economic Impact of Open Source on Small Business: A Case Study

Preface

This report was inspired by a conversation between Tim O’Reilly and Hari Ravichandran of Endurance International Group (EIG). Hari remarked that his web hosting business had been enabled by open source software, and that he wished he could find more ways to give back to the communities that have made his success possible. Tim suggested that a novel way to give back would be to work together on a study making clear just how much of a role open source software plays in the hosting industry, and by extension, in enabling the web presence of millions of small businesses.

Hari graciously agreed to provide data collected by EIG’s Bluehost division as the basis for this study. What we have tried to do here is to help broaden the discussion of open source software’s impact beyond "the usual suspects" like Red Hat, MySQL, and other pure-play open source companies, and instead to focus on how open source has been a direct enabler not only of Internet companies, but of any business that enjoys an Internet presence.

One of our sayings at O’Reilly is "Create More Value Than You Capture." Open source software is one of the great examples of that principle. Rather than measuring the value captured by companies that provide open source software or services based on that software, this report tries to hint at how value is instead captured downstream by users of that software.

Open source developers are unsung heroes of our economy. It is not always the business titans, who have managed to extract ...