Chapter 17. Financial Metrics for Software Services

Defining a Software Service

Determining the value added from software services is a little different and presents a different problem from that presented in Chapter 16 for software products. First, it is necessary to define a software service in this context.

A service is something paid for on a renewing basis. The user does not gain perpetual rights—there is an implied annuity. The telephone system is a service. There is a monthly recurring charge plus additional charges for usage. Yahoo! email is a service. The online edition of the New York Times is a service. Software sold on a leased basis or Internet web service/application service provider basis is a service.

High technology services, ...

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