Capturing the value created by using open source for a project within an enterprise client is influenced by many factors- evaluating total cost of ownership, ease of use and customization and extending the source code to new applications. However, I believe another aspect of value is in viewing a move to open source, as creating a real option within your IT department.

The primary assumption behind this analysis is that a proprietary relationship will involve a mandatory ongoing cost, for upgrades, feature sets or new versions-required by the vendor to remain 'current'. Also, the vendor has built in an inherent switching cost associated with changing from their proprietary offering to another solution.  Although, transitioning to open source involves cost- this outlay is seen as the 'option premium' for the source code. Now, the interesting thing-mentioned in many articles, blogs and books- by esteemed colleagues-is just having the source code avaiable does not mean you will use it-BUT you have the option too.  We purport this option has tangible value.

The value is determined by forecasting future 'mandatory upgrades and or modifications charges' that would have, or have a statistically high probability of being charged, minus the 'option premium' of the open  source project. For example: you forecast spending a required additional $2million for the proprietary vendor x (too remain current, or add desired features-where you must use the vendors' resources), minus the cost of an open source build of $1million (which not only delivers value, but also offers the opportunity to train your own resources to address future needs, lowering TCO, creating flexibility)- in sum, thereby 'creating' an option worth $1million.

So, even if you don't 'really' use the source code- it provides a fiscally based, flexible environment- a real option for potential future use.  Now, the interesting part is who is going to build a market and start trading these options? Carbon credits anyone?