Facebook destroys billions of dollars of shareholder value with their open source projects — Part II

By David Axelrod

LOL of course not. A couple articles about sensational news made me want to give it a spin. Your reactions have led to the most exciting and fascinating weekend of my life. Developers stand on the shoulders of giants every single day, myself included. We need to support open source just as fiercely as we oppose the monetization of it. Take this time to donate a couple bucks to your favorite open source project. All revenue generated from these two articles is going straight to the Django foundation as it’s the framework that has shown me the most love over the past few years. If you care to, do read my analysis and please contribute to it!

Facebook has created billions of value with its open source projects, shareholders included. React, React-Native and all its other open source projects do not provide immediate cash flow but their contribution to the company’s shareholders is quantifiable. We can measure the impact it has on hiring, software quality, competitive stance, and even developer popularity.

The job market is the tightest in a long time and that’s also true for software development talent. Open source usage is pervasive among Hackathon participants with over 4606 projects on Devpost that use React alone. This, combined with the fact that professionals in the industry are picking up React at a record pace, generates a strong pipeline for front-end talent. We can assume the minimum cost to hire a software developer is at least 5k due to technical recruiting staff as well as a number of “referral bonuses” that are offered by companies like Triple Byte and Stack Overflow.

Taken from the 2018 SO developer survey

As far as code quality is concerned, internally built products are often riddled with bugs. Open source democratizes the code review and testing process, drastically reducing initial issues (in addition to decreasing the amount of time that it takes to push fixes) which saves roughly 30–40% of development time. Facebook also no doubt benefits from the goodwill developers have towards the company that made building front-ends more scalable and intuitive. Although that's harder to quantify we can say that people who download react from NPM must see the value the framework provides.

One commenter said that we need to come up with quantified counter arguments to the monetization of open source so I gave it a shot. I came up with a net benefit of ~19 billion, but you’re free to make your own conclusion and contribute.