Insights into the Linux Foundation’s 2023 Annual Report

The Linux Foundation's 2023 annual report: Here's where funds were allocated to boost open-source innovation and growth.

You’ve likely heard of the Linux Foundation, and just by its name, it’s easy to link it directly with everything Linux. For those not in the know, it might conjure images of a team of Linux tech wizards tirelessly exploring the intricacies of the Linux kernel and its myriad distributions. Well, this has nothing to do with the reality.

So, before we dive into the numbers and explore how the Linux Foundation spent its funds in 2023, let’s first shed some light on what the organization truly stands for.

The Linux Foundation: Not Just About Linux

Founded in 2000, the Linux Foundation is a non-profit organization that fosters the growth and development of the Linux operating system and open-source software.

Presently, its governance is overseen by a board of directors comprising 24 members. They are representatives of some of today’s biggest tech giants, including notable names such as Microsoft, Oracle, Intel, VMware, Samsung, Sony, Red Hat, Huawei, Meta, Qualcomm, Hitachi, Fujitsu, and Ericsson, among others.

The foundation supports the Linux ecosystem, providing financial and intellectual resources, infrastructure, services, events, and training. Its primary focus is promoting, protecting, and standardizing Linux and open-source software projects.

One of its essential functions is to provide a neutral space where developers, companies, and other stakeholders can collaborate on open-source projects. Moreover, the Linux Foundation manages various collaborative projects under its umbrella, covering networking, security, cloud, and automotive technologies.

Last but not least, it’s also known for hosting important gatherings and conferences in the tech world, such as the Open Source Summit, which brings together developers, businesses, and other open-source community members to discuss and collaborate on the latest technologies and trends.

In essence, the Linux Foundation acts as a steward and catalyst for the open-source movement, promoting the use of Linux in general and fostering innovation through collaboration, and has nothing to do with individual distributions.

With those points clarified, let’s delve into the figures and explore the organization’s financial priorities in the past year, 2023, focusing on how the funds were allocated.

Income and Expenditure 2023: The Big Picture

Before we begin, it’s important to note a key point. The analysis below is based on the recently published Linux Foundation’s 2023 annual report, a comprehensive document spanning 160 pages. Those interested in further exploring it can access the report directly through this link. Now, on to the numbers.

The total revenue and expenses of the Linux Foundation for the year 2023.
The total revenue and expenses of the Linux Foundation for the year 2023.

Starting with an overview, it’s evident that the Linux Foundation operates with a substantial budget. In 2023 the organization reported significant revenues, totaling approximately $262.6 million. However, its expenses for the same year were even higher, amounting to around $269 million. In short, the foundation’s expenditures surpassed its income by over seven million dollars.

According to the reported data, the organization experienced a financial shift in 2023 compared to 2022. In 2022, the total revenues stood at $243.57 million, while expenditures amounted to $254.96 million. In other words, for 2023, there was an approximately $20 million, or nearly 8%, increase in revenues. At the same time, expenditures also rose to a lesser extent, with an increase of about $15 million, around 5%.

The Four Pillars of Linux Foundation’s Revenue

If you’re wondering where the foundation’s revenue came from in 2023, here’s the answer.

1. Memberships and Donations: The Backbone (45%)

This means that accounting for nearly half of the foundation’s revenue ($117,213 million), memberships and donations form the backbone of its financial structure. Memberships often include big tech companies that rely on Linux and open-source software for their operations, underlying the trust and importance the corporate entities have in the Linux Foundation.

Of course, beyond the big names in their role as platinum members, many other companies with gold members status, such as Google, Alibaba Cloud, Toshiba, Toyota, Panasonic, DELL, etc., also financially support the organization. Apart from these, many smaller companies are also contributing, with the number of supporting member companies of the Linux Foundation at 1,709 for 2023.

2. Project Support: Catalyzing Innovation (26%)

Support for various projects constitutes 26% ($67 million) of the revenue. This segment is significant as it reflects the foundation’s role in facilitating technological advancements. By funding specific projects, the foundation nurtures innovation and develops new technologies in directions that align with the broader community’s needs.

3. Event Registrations and Sponsorships: Community Engagement (19%)

Events are crucial in the open-source community, serving as hubs for collaboration, networking, and learning. The 19% ($49,517) revenue from event registrations and sponsorships highlights the value placed on these gatherings. These events, like the Open Source Summit, are both revenue streams and vital for the Linux and Open Source community engagement and knowledge sharing.

For example, in 2023, the Linux Foundation organized 234 events with 75K attendees.

4. Training and Certification Programs: Empowering Professionals (10%)

The foundation’s focus on education is evident from the 10% ($27,253 million) revenue generated from training and certification programs. These programs are crucial in empowering professionals with the skills to thrive in the open-source ecosystem.

This ensures a steady influx of skilled individuals and reinforces the foundation’s commitment to education and professional development within the industry.

In 2023, the organization issued 33,000 certifications, marking a significant growth of 26% compared to the prior year in 2022.

The Linux Foundation’s 2023 Key Sectors

Let’s begin by noting that in the past year, the organization supported over 1,133 open-source project communities, marking an increase of 137 projects, or 10%, compared to 2022.

Now, let’s delve into the most fascinating segment: the areas where the Linux Foundation has significantly invested its resources in 2023.

Тхе Linux Foundation’s 2023 spending by sectors.
Тхе Linux Foundation’s 2023 spending by sectors.

From the chart presented, it’s clear that in 2023, its primary focus (25%) was on the cloud, containers, and virtualization sectors. This aligns well with the prevailing trends in the technology sector, where cloud computing and containerization have become fundamental to enterprise and consumer applications.

As organizations migrate to cloud environments, the Linux Foundation’s focus in this area suggests it aims to support and lead in developing open-source tools and standards that facilitate cloud computing, positioning itself at the forefront of modern technological needs.

In the rankings, projects associated with networking and edge occupy the second spot with 13%, followed by artificial intelligence, machine learning, data & analytics in third place at 12%, and web & application development in fourth place with 11%.

You might have quickly noticed that only two percent of the expenses are allocated to Linux kernel support. Although this percentage appears modest, it translates to a substantial figure of $7,804 million, representing a significant investment in kernel development.

Regarding the nature of the projects, it’s unsurprising that the Linux Foundation heavily prioritizes open source. Specifically, in 2023, about 72% of the projects it engaged in were connected to open-source software, while 20% pertained to open standards and specifications.

A mere 2% of the foundation’s resources were allocated to open hardware initiatives, highlighting its primary emphasis on software development and establishing open standards.

Bottom Line

The Linux Foundation has evolved far beyond just focusing on Linux; it now acts as a central hub for fostering the growth and development of open-source software and projects. And its 2023 report only proves and underscores its indispensable role in the technology sector.

So, yes, while it’s true that you and I can download and use a wide range of excellent open-source software tools at no cost, there’s an investment made in their development and support. This is largely thanks to organizations such as the Linux Foundation, who provide financial support at the foundational level.

Indeed, this represents only a minor part of the vast universe of the Open Source. Numerous other projects are less lucky to receive financial backing from entities such as the Linux Foundation or major tech corporations.

This gap is where the invaluable, voluntary efforts of countless developers worldwide play a crucial role. Their dedication sustains the essence and spirit of the Open Source, elevating it to a pivotal status upon which today’s technological world depends.

Bobby Borisov

Bobby Borisov

Bobby, an editor-in-chief at Linuxiac, is a Linux professional with over 20 years of experience. With a strong focus on Linux and open-source software, he has worked as a Senior Linux System Administrator, Software Developer, and DevOps Engineer for small and large multinational companies.

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