Chapter 3

Aspects of Software Valuation

Steve Tockey,    Construx Software, Bellevue, WA, USA

Basing software technical decisions on economics has not been generally recognized as important in the software industry. However, most software is being developed and maintained in a business context, so the business consequences of technical choices must be considered. A commercial software development project, a low-cost payroll processing application targeted at small businesses, is used to introduce the basic elements of economic analysis for software projects. Development of the software in an Automated Test Equipment (ATE) system is then used to illustrate the same elements for internally developed software. Next the approach is generalized using ...

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