Your Company Should Probably Pay $2,000 per Person for Open Source

The volunteer open source community creates tremendous value for the global economy but gets almost nothing in return. Yes, by definition, open source software “shall not require a royalty or other fee.” But society needs the open source community to at least be financially solvent, and it’s not. It’s barely surviving.
How can the open source community keep the lights on?
The answer is simple: companies need to pay for open source. They benefit the most from the community’s efforts, and they have the most money. Companies do already pay for about half of open source overall, by allowing their employees to work on open source software on company time. They also need to pay for the other half, the half produced by the volunteer open source community.
How much should companies pay?
Open source’s royalty-free licensing is a primary reason for using open source in the first place, so we know that companies are not going to foot a trillion dollar bill. Luckily, they don’t have to. Companies pay a premium for the right to direct an employee’s work. By giving up direct control over how the open source community spends its effort, they can realize a significant cost savings. The current discount of 99.98% is too extreme, but companies should be able to pay for the open source community’s labor at a significant discount, while the folks in the community make a modest living working in self-directed collaboration free of employment relationships. It feels like we should be able to make this work.
One way I like to think about the open source community is as an invisible tech giant. Mårten Mickos, CEO of HackerOne and former CEO of MySQL, puts the size of the open source community at about 500,000 people. Since Evan You and approximately three other people are the only ones currently living in a glorious open source future, let’s put the full-time equivalency of those 500,000 people at 5%: that comes out to 25,000 engineers, which is about how many Alphabet has (per SEC filings). A big theme in open source sustainability is valuing non-code contributions: Alphabet employs about 50,000 non-engineers.
So if the open source community is a tech giant roughly the size of Alphabet, how much income does it need in order to sustain itself?
Alphabet’s revenue is $90B/yr, and their average compensation per person is $187,500/yr ($125,000/yr salary × 1.5 for benefits). Now, researchers Daniel Kahnemann and Angus Deaton put the threshold of minimum compensation for maximum emotional well-being in the U.S. at $75,000/yr. Adjusting for inflation, let’s eyeball it that Alphabet pays a 100% markup to direct their employees’ labor. In other words, we could rouse a slumbering open source giant—and secure the future of the open source community we all rely on—for $45B/yr.
How much should each company pay?
Companies benefit from open source most directly in their own technical employees’ boosted productivity. There are 21M employed programmers in the world. To move 25,000 of them into full-time open source work (at a 50% cost savings) and also account for non-technical contributors, each company with their own technical employees should pay the open source community $2,143 per year per technical employee at the company.
This would work out to maybe 1–3% of total employee compensation across a range of cases, which seems fair given that open source boosts productivity by 20%.

Source: Gratipay.news

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