Pilot study on estimating the value of Open Source software

This project, funded by PagoPA S.p.A., aims to develop and test an innovative methodology for estimating the economic value of Open Source software. The analysis was conducted on a specific case study, “Firma con IO”, an advanced digital service enabling Italian citizens to sign documents directly via the IO app. The project resulted in a detailed economic evaluation of the software, considering both its internal development and its dependencies on Open Source libraries. In addition to defining a replicable and transferable methodology, a software pipeline has been developed to automate the valuation process. This tool implements the defined methodology, automating dependency mapping, source code retrieval, development cost calculation, and usage analysis of dependencies, offering a scalable and efficient solution for OSS economic value estimation.

Open Source Software (OSS) is a cornerstone of technological innovation and global economic development. The European Commission estimates that OSS investments generate an economic impact between €65 and €95 billion annually, while research from the Harvard Business School values the global OSS supply at $4.15 billion, with demand reaching $8.8 trillion.

PagoPA S.p.A., a company owned by the Italian Ministry of Economy and Finance, is committed to modernizing public administration through digital services and infrastructure. As part of this mission, PagoPA has embraced Open Source by publishing over 750 repositories on GitHub, relying heavily on OSS libraries and frameworks. Given the strategic importance of this software, PagoPA required a scientific approach to quantify its economic value, both for internal projects and the OSS dependencies they leverage.

The “Firma con IO” project was selected as the pilot case due to its representative characteristics: a well-documented modular architecture, a strategic role in enabling digital transformation, and its integration with numerous OSS libraries.

• Develop a methodology to estimate the economic value of Open Source software, considering replacement cost and usage value.
• Analyze the “Firma con IO” project, including internal development costs and the economic value of its OSS dependencies.
• Create an analysis tool leveraging established models like COCOMO-II and advanced data collection techniques to estimate the economic value of dependencies.
• Ensure the replicability and transferability of the developed method for future applications.

The project delivered the following outcomes:

1. Economic valuation: the estimated economic value of the “Firma con IO” project, integrating direct development costs and the economic contribution of OSS dependencies.
2. Documented methodology: a complete description of the valuation process, specifically tailored for the PagoPA context, based on scientific approaches and quantitative models.
3. Analysis tool: a custom software pipeline for collecting and analyzing dependencies, estimating development costs, and integrating correction factors and usage rates.  
4. Replicability: the developed methodology and tool are designed to be applied to similar projects, fostering standardization in OSS valuation.