Software Market Factors
Incentives to produce high quality, inexpensive software:
- availability of non-software alternatives, particularly in smaller scale businesses
- importance of reputation
Incentives to produce low quality software:
- training/support revenue often easier to collect than software usage revenues
- see speed-to-market factors
Incentives to get software quickly to market:
- brand allegiance in software is compounded by need to modify old documents
- network effect for a lot of software makes software much more valuable as more people use it
Incentives to create small, reusable components:
- allows greater agility in producing customized software
Incentives to create highly complex architectures:
- bundling lets you sell a bunch of products on the merit of one
Other unique market factors for software:
- software benefits can be highly intangible and difficult to measure
- software project durations are hard to predict
- software has extremely low replication costs