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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]
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 businessedit
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 businessedit
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 businessedit
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:
Companies that provide consultation services related to software business
Companies that provide software development services as a subcontractor.
Service Operationsedit
Characteristics of Service Operations [6] that are relevant to software services industry:
Intangibility: Service is produced instead of tangible product. Therefore, service innovations can be easily copied by competitors.
Perishability: Human resource intensive services cannot be produced in advance, therefore demand and supply is difficult to manage. This also affects business scalability.
Heterogeneity: Service encounters are unique and customer needs vary, therefore software services are difficult to standardize and productize. Therefore, service business is also difficult to scale.....
^ abcKarl M. Popp; Ralf Meyer (2010). Profit from Software Ecosystems: Business Models, Ecosystems and Partnerships in the Software Industry. Norderstedt, Germany: BOD. ISBN978-3-8391-6983-4.
^D.G. Messerschmitt and C. Szyperski, Software Ecosystem: Understanding an Indispensable Technology and Industry, MIT Press, 2003
^Cusumano M. (2003) Finding Your balance in the Products and Service Debate, Communications of the ACM. Vol. 46:3
^Nambisan S. (2001) Why Service Business are not Product Businesses, MIT Sloan Management Review. Vol. 42:4
^Cusumano, Michael A., The business of software, Chapter 2., New York : Free Press, 2004
^Bitran G. & Logo, M. 1993, A Framework for Analyzing Service Operations. European Management Journal 11 (3):271-282
January 01, 1970
software, business, this, article, multiple, issues, please, help, improve, discuss, these, issues, talk, page, learn, when, remove, these, template, messages, this, article, provides, insufficient, context, those, unfamiliar, with, subject, please, help, impr. 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 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 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 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 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 Contents 1 Types of software businesses 1 1 Software product business 1 2 Software service business 1 2 1 Characteristics of software services business 1 2 2 Service Operations 2 See also 3 ReferencesTypes of software businesses editCusumano 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 edit 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 edit 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 edit 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 Companies that provide consultation services related to software business Companies that provide software development services as a subcontractor Service Operations edit Characteristics of Service Operations 6 that are relevant to software services industry Intangibility Service is produced instead of tangible product Therefore service innovations can be easily copied by competitors Perishability Human resource intensive services cannot be produced in advance therefore demand and supply is difficult to manage This also affects business scalability Heterogeneity Service encounters are unique and customer needs vary therefore software services are difficult to standardize and productize Therefore service business is also difficult to scale See also editBusiness models for open source softwareReferences edit 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 D G Messerschmitt and C Szyperski Software Ecosystem Understanding an Indispensable Technology and Industry MIT Press 2003 Cusumano M 2003 Finding Your balance in the Products and Service Debate Communications of the ACM Vol 46 3 Nambisan S 2001 Why Service Business are not Product Businesses MIT Sloan Management Review Vol 42 4 Cusumano Michael A The business of software Chapter 2 New York Free Press 2004 Bitran G amp Logo M 1993 A Framework for Analyzing Service Operations European Management Journal 11 3 271 282 Retrieved from https en wikipedia org w index php title Software business amp oldid 1153688020, wikipedia, wiki, book, books, library,
