Economics of Software Reuse and Market Positioning for Customized Software Solutions

Most of the software companies can neither be typical software product based company like Microsoft nor afford to develop each customized application for individual customer from clean slate without taking into consideration of reuse. Software companies are under increasing competitive pressure for improving delivery parameters such as cost, quality, and time. Systematic reuse is an opportunity of continued cost reduction, quality improvement and lead time reduction in software delivery. Systematic reuse largely depends on the scope of delivering customized software applications in the same market segment repeatedly to multiple customers. Thorough market analysis provides basic inputs for defining generic product concept for delivering mass customized solutions. The problem of establishing a successful new business around a generic software product concept is not challenging because of shortage of ideas, but rather problems exist in proper analysis of the market and adoption of reuse capability for continued price reduction and quality improvement to deal with evolving market forces for delivering mass customized solutions. This paper, therefore, suggests the application of market positioning strategy to benefit from software reuse for delivering customized software solutions. In this paper, economics of software reuse has been integrated with market positioning for delivering customized software solution. It is believed that such integration will improve the decision making ability of software professionals for strengthening the capability of software companies in delivering customized solutions to target market segment by taking the advantage of software reuse economics.