Economic Assessment.md

ECONOMIC ASSESMENT

Cost Analysis

The cost of the project depends on the goal that needs to be accomplished. A focus on good quality products is a great asset to any business. However, without the ability to generate profits, the quality of your product offering has little value. If you cannot afford to stay in business market because the development time and costs outweigh the amount of revenue earned from sales, your attention to detail and strong commitment to user needs will be lost.

At a minimum, a cost-benefit analysis should factor in the following components:

• Development Cost: This includes the time required of the development team, management and administrative staff. Remember, too, that time spent on one project is time spent away from other, potentially more profitable projects. Any costs associated with tools, technology or other non-human resources should also be factored in.

• Projected Sales: The identification of target sales goals should include expected sales and revenue volume at different price points to best identify the ultimate product price.

• Sales Cost: When estimating sales revenue, any cost of selling your product should be included. This may include advertising, sales team commissions or salaries and more.

• Maintenance Cost: The world of software creation is never a one-time thing. Practically every software product that is developed will have ongoing corrective, adaptive or perfective maintenance tasks and associated costs. There are also planned updates or enhancements to the program that must be considered. Each of these costs should be factored into the original project from the outset.

• Operational Cost: Once we have started with the work of developing the project a close attention needs to be done on the working and the functions that need to be performed by that particular project and its objective that we are working on. In our project we need to pay attention on the startup time of the operating system and what all cost we will incur with the operation that will be performed to achieve our goal.

• Setup Cost: After the development of the project we need to give training to the employees based on the business requirement, provide courses to the employees. This will also include the renting of the cloud server.

Cost of development of the system

Linux has firmly established itself as a preferred delivery vehicle for modern applications; in addition to that role, it has become the preferred platform for cloud infrastructure. Within the broader Linux category, enterprise customers usually gravitate to enterprise distributions for the benefits those distributions deliver on — efficient operational costs, better reliability and availability, and better scalability in terms of both users per server and servers per administrator. These benefits typically translate into a better Return on Investment (ROI) for enterprise customers, which IDC’s business value research measures and highlights.

Considering the RedHat Linux Enterprise Linux as base: (Business Value Highlights)

• 348% average three-year ROI
• 7 months to breakeven
• 40% lower three-year cost of operations
• 20% lower IT infrastructure costs
• 45% more efficient IT staff operations
• 68% less unplanned downtime
• 26% faster deployment of new business applications

We would like to estimate our cost for development and improvement of OS boot time:

1. Resource - Human resources + Infrastructure resources
2. Time - Estimated time for the development of the project
3. Market - Where is the market is moving? Market analysis

Expected cost of operation of system (Operation - Maintenance) - This requires.

Benifits due to project

1. Direct benefit:

   • Due to reduction in boot time, the system can start fast with less waiting time.
   • Enhanced customer satisfaction as they don't have to wait long for their system to reach desktop.

2. Assessable benefits:

   • Some user spends money on Buying expensive Memory chips or Solid-State Drives (SSD) to Increase the speed of their system startup, but since system will already start fast so Cost on buying that Expensive hardware will be saved.
   • Since all the internal working will be well handled by the development team, So Users don't have to manually perform any task, hence reducing chances of errors.

3. Intangible benefits:

   • Every User whether belonging to organization or home usage, they want their system to start fast.
   • Hence Fast startup can lead to popularity among users as well as can lead to increased sales and profit.
   • Chances of further improvement can be elevated as every process involved for fast startup are well acknowledged by the Development team.
   • The rise in Popularity of the project can lead to enhanced employee interest towards organization which can help in reduced staff turnover and increased strength of skilled employees.

Net Profit

Net Profit = Total Revenue - (Total Investment + Operating expenses + Taxes + Dividends if any)

Source of Income

• Donations:

  As our operating system will become more popular and will have more user’s donation amount will increase. It is depended on the quality of our operating system, which means delivered product should be efficient. It is based on the end-user’s satisfaction.

• Paid Support

  The most common way to get revenue from OSS is to provide paid support. It is an effective tool for making profit from open source for a few reasons. First, enterprise owners can save money on their payroll. Instead of hiring in-house specialists, enterprises can have access to certified support specialists on a less expensive basis. Second, enterprises can have peace of mind knowing that they can call in the pros whenever a problem arises.

• Dual Licensing

  Dual licensing allows companies to release commercial software (with a commercial license) that’s derived from free OSS commonly distributed under the GNU General Public (GPL) license. Dual licensing can be implemented in a few ways. In the first scenario, a company releases identical products under a commercial license and under a free license like GPL. In the second scenario, the company releases different versions under different licenses. So, what’s the point of dual licensing? The GPL license allows end users to run OSS, redistribute that software, and modify it. However, you can’t embed OSS solutions into your proprietary (commercial) software and make profit under a GPL license. This is precisely where you’ll need a commercial version of an open source product to have the right to sell your commercial software.

• Paid extra feature / functionalities

  Charging the money for additional features, functionalities, or updates, we can't call such approach selling open source software. As we mentioned previously, customers feel most comfortable paying for only the services they utilize. Which is why, charging money for extra functionality is attractive for a number of reasons. First, it’s quite clear what additional functionality customers are paying for. Second, customers can save money on deployment and troubleshooting when these services are included in paid packages. For instance, GitLab distributes their developer tools in three editions. Their version for enterprises includes premium support, file locking and advanced solutions for remote teams, and is billed per user.

• Paid Certification

  Getting certified, as a developer, is quite useful for a number of reasons. First, it’s a great opportunity to differentiate yourself among other specialists with the same skills. Second, developers realize the importance of networking with mentors and groupmates. Finally, a developer’s certification leads lends them additional professional credibility and even promotions, and can boost a company’s image. We provide various types of certification for the individual as well as for the organizations

Cumulating the above income sources, we approximately get rupees 2,50,000 per year. So it would be added to our net profit.