This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages) This article provides insufficient context for those unfamiliar with the subject. Please help improve the article by providing more context for the reader. (March 2016) (Learn how and when to remove this template message) This article appears to be slanted towards recent events. Please try to keep recent events in historical perspective and add more content related to non-recent events. (March 2016) The examples and perspective in this article may not include all significant viewpoints. Please improve the article or discuss the issue. (March 2016) (Learn how and when to remove this template message) This article may lend undue weight to certain ideas, incidents, or controversies. Please help improve it by rewriting it in a balanced fashion that contextualizes different points of view. (March 2016) (Learn how and when to remove this template message) This article needs to be updated. Please help update this article to reflect recent events or newly available information. (March 2016) (Learn how and when to remove this template message)

Software Business is the commercial activity of the software industry, aimed at producing, buying and selling software products or software services. The business of software differs from other businesses, in that its main good is intangible[1] and fixed costs of production are high while variable costs of production are close to zero.[1][2]

Types of software businesses

Cusumano [3] and Nambisan [4] divide software companies (supplier-side) into service and product companies according to how they conduct business. Popp and Meyer give a more detailed analysis of different types of business models of software companies.[1]

Software product business

In the Software product business, Software is licensed for installation and execution on a user- or customer-supplied infrastructure. In the software product business, revenues typically originate from selling software upgrades to the customer.

Software service business

Software services business is a strategy of a software company whose offering consists mainly of services or consulting relating to software development.

Characteristics of software services business

Generally, business model of a software company can be categorized as a product company, services company or a hybrid between these two models.[5] Software service business can also refer to offering Software as a Service.

Software services business can be categorized into the following categories:

Service Operations

Characteristics of Service Operations [6] that are relevant to software services industry:

See also

References

  1. ^ a b c Karl M. Popp; Ralf Meyer (2010). Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Norderstedt, Germany: BOD. ISBN 978-3-8391-6983-4.
  2. ^ D.G. Messerschmitt and C. Szyperski, Software Ecosystem: Understanding an Indispensable Technology and Industry, MIT Press, 2003
  3. ^ Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. Vol. 46:3
  4. ^ Nambisan S. (2001) Why Service Business are not Product Businesses, MIT Sloan Management Review. Vol. 42:4
  5. ^ Cusumano, Michael A., The business of software, Chapter 2., New York  : Free Press, 2004
  6. ^ Bitran G. & Logo, M. 1993, A Framework for Analyzing Service Operations. European Management Journal 11 (3):271-282
Category