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30. Economic and Business Aspects

Commercial databases pay federal state taxes, sales tax, employment taxes, social security taxes, health care for employees, bunch of benefits for employees, marketing and advertisement costs. All these costs do not go directly for the development of the database. When you buy a commercial database, about 60% of amount goes to taxes+benefits, 20% for marketing, 10% for profit margin and the balance 10% for actual database R&D costs. Hence the real worth of the database is much less.

Also commercial databases have to pay for buildings/real-estates and purchase Unix machines, install and maintain them. All of these costs are passed onto customers.

PostgreSQL has the advantage over commercial databases as there is no direct tax since it is made on the internet. A very vast group of companies contribute to the development of the PostgreSQL. For example, if there are one million companies in U.S.A and each contribute about $ 10 (worth of software to PostgreSQL) than each and every company will get ten million dollars!! This is the magic of software development on internet.

Currently, PostgreSQL source code is about 2,00,000 lines of "C", "C++" code. If cost of each line of "C" code is $ 10 than the total cost of PostgreSQL as of today is $ 2,000,000 (two million dollars!!).

Many companies already develop in-house vast amount of "C", "C++" code. Hence by taking in the source code of PostgreSQL and collaborating with other companies on internet will greatly benefit the company saving time and efforts.

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