Purchasing as Market-Shaping: the case of component-based software engineering

Marketing scholars have recently started to address markets as constructed, socio-material orders rather than taking them as naturalised entities. This approach contrasts with traditional economic sociology which focuses on markets as purely social structures. However, within marketing, the study of market-shaping efforts has hitherto focused almost exclusively on the supply side and the role of marketing activities in shaping demand. And yet, there are many other markets where the distribution of influential market actors is more evenly balanced and the role of purchasing is just as important as marketing. In this paper we focus on an example where purchasing plays a key market-shaping role. The market in question is standard software components. Component-based software engineering is based on the idea that software systems are developed by pre-producing and selecting appropriate existing modules and assembling them according to a well-defined architecture. Even though the use of software components is being trumpeted in many software development fora, the market for standard software components is still in its infancy. The purpose of the present study is to analyse the emerging software component market from a purchasing perspective and to identify how buyers are seeking to shape the emerging market. We describe the role of prospective customers in developing the supply structure for standard software components that corresponds closely to their preferred template of how this market should function. This involves the creation of a competitive supply base, robust standards to facilitate the specification and purchase of software components, and an appropriate system that would allow customers to assess the risk they take on by including standard components in their software systems.