Forget IBM, Microsoft, and Oracle. How much software do you think businesses have developed for internal use? Here's one expert's guesstimate.Ken Krugler is in the business of managing code. His startup, Krugle, has developed a source code search system that crawls, parses, and indexes code from hundreds of public and private software repositories, including SourceForge, CollabNet, and Yahoo's developers network. Krugle is putting the finishing touches on an appliance version of its technology for IT departments. The product will be generally available any day.

That experience gives Krugler a rough idea of just how much software is out there. Krugle, for example, has stored and indexed 2.6 billion lines of code, which includes thousands of open source tools. As a point of comparison, Windows Vista ranges from 50 million to 100 million lines of code, depending on what components you include and who's doing the estimating.

Now that Krugle is moving into the corporate IT market, Krugler's done some back-of-the-envelope calculations on how much code corporate developers have cranked out over the past 20 years or so. He puts it at "several hundred billion" lines of code. Where's it all coming from? Everything from small development teams to financial institutions and government contractors with thousands of software developers.

When you factor in salaries and other expenses, Krugler says it costs $50 to $100 per line of code developed. That would put the investment in proprietary, internally developed software, measured in today's dollars, in the trillions. Companies are looking to capitalize on that massive investment. Krugler expects a significant percentage of corporate code to become open source as CIOs try to benefit from the dynamics of community development and software sharing.

Internally developed software represents a tremendous amount of intellectual property, a cache that's growing in size and value. If Krugler's right, he may be selling a lot of appliances.

For more on Krugle, see InformationWeek's Startup Of The Week.