Pricing Software Development Services

This paper studies the pricing of software development outsourcing. Two pricing techniques – time and material and fixed price – are described and the economic conditions for selecting between them are discussed. Using agency theory and transaction cost economics, it is predicted that risky and specific systems will be priced on time and material basis while other projects will be fixed price. An additional prediction is that confidence in the vendor’s auditing of resources is essential for time and material contracts. The predictions are tested on fourteen external software development projects in two large corporations. Quantitative measures of risk, specificity and confidence are utilised, but the data-set does not support the theoretical predictions. In order to explain this result, interviews with senior managers at the two corporations have been conducted. Both disagree with the theoretical prescriptions: one contracts risky projects on fixed price basis, preferring to pay a risk-premium rather than to rebudget. The second expert allows fixed price only with trusted vendors, preferring time and material with all other vendors

(Self-)Regulation of a Natural Monopoly via Complementary Goods - the Case of F/OSS Business Models

The paper investigates the optimal regulation of a (software) firm which acts as a natural monopolist, who also offers a complementary good (IT services) on a competitive market. It is shown that a first-best-regulation accompanyied with an optimal taxation schedule in order to compensate the losses is equivalent to a cross-subsidisation of the software by the complementary good. This is the same result as in business models with Free/Open Source Software (F/OSS). Even if a price of zero for F/OSS does not reflect the use of resources for software development, the price system in F/OSS related markets leads to a welfare improving allocation. F/OSS license models can be seen as institutional arrangements which mimick a social planner.natural monopoly, regulation, Ramsey pricing, welfare, complementary good, Open Source Software

Performance Monitor: The Opportunity Costs of Revenue Management

Revenue management (RM) brings rational approaches to pricing for goods and/or services with a limited shelf life. The practice of dynamically pricing a perishable product across different market segments continues to be applied across an ever-increasing set of business arenas. While numerous consulting and software development firms preach the bottom line impacts of RM practice, little effort is applied to monitoring the success of RM systems once in place. The continued success of RM hinges upon the ability to link organizational performance to the pricing and capacity decisions of RM systems. This link both reinforces the financial gains attributable to RM and indicates opportunities for future improvement. This paper outlines Performance Monitor, a phased approach to performance measurement designed and implemented at Dollar Thrifty Automotive Group, Inc. The focus is on the impact of RM practice via a dissection of the lost revenue opportunities of historic decisions

Generating Value Through Open Source: Software Service Market Regulation and Licensing Policy

In the software industry, commercial open-source software vendors have recognized that providing services to help businesses derive greater value in the implementation of open source–based systems can be a profitable business model. Moreover, society may greatly benefit when software originators choose an open-source development strategy as their products become widely available, readily customizable, and open to community contributions. In this study, we present an economic model to study how software licensing attributes affect a software originator’s decisions, aiming to provide policy makers with insights into how welfare-improving, open-source outcomes can be incentivized. We show that when a competing contributor is apt at reaping the benefits of software development investment, a less restrictive open source license (e.g., Berkeley Software Distribution, or BSD style) can improve welfare. On the other hand, when the originator is better at leveraging investment and service costs are high, a more restrictive license (e.g., General Public License, or GPL style) can be best for social welfare even when a contributor can cost-efficiently develop the software. The online appendix is available at https://doi.org/10.1287/isre.2017.0726

Experimenting with mashup features in the mobile space

Social network websites like Facebook and MySpace are widely used worldwide and the mashup content aggregation technology is gaining attention by many software developers and CTOs which are looking at it as a potential replacement of portal technologies. At the same time, social network websites are attracting the interest of some firms and CRM software vendors. With flat-rate pricing offers for mobile data traffic by the most important mobile telephony operators a growth in demand of mobile data services is expected. The aim of this thesis is to develop a mobile mashup of context aware news provisioning and social networking services to be integrated into an existing mobile mall software. First we introduce social network analysis, the theory lying behind social networks, and its most relevant findings. We define what is a social network website and how it differs from a mobile social network. To understand what influences the adoption of mobile data services a model based on the Triandis theory of explaining human behaviour is introduced and used. We will then analyse the state of the art in social network websites, event planning services and technologies to deliver news from different sources. The analysis will enable us to identify what are the most important services to include directly in the mashup and which ones have to be developed internally. Lastly we introduce the technologies used to develop the mobile mashup application and display the most relevant design and development work done during the thesis

Towards an open cloud marketplace: vision and first steps

As one of the most promising, emerging concepts in Information Technology (IT), cloud computing is transforming how IT is consumed and managed; yielding improved cost efficiencies, and delivering flexible, on-demand scalability by reducing computing infrastructures, platforms, and services to commodities acquired and paid-for on-demand through a set of cloud providers. Today, the transition of cloud computing from a subject of research and innovation to a critical infrastructure is proceeding at an incredibly fast pace. A potentially dangerous consequence of this speedy transition to practice is the premature adoption, and ossification, of the models, technologies, and standards underlying this critical infrastructure. This state of affairs is exacerbated by the fact that innovative research on production-scale platforms is becoming the purview of a small number of public cloud providers. Specifically, the academic research communities are effectively excluded from the opportunity to contribute meaningfully to the evolution not to mention innovation and healthy mutation of cloud computing technologies. As the dependence on our society and economy on cloud computing increases, so does the realization that the academic research community cannot be shut out from contributing to the design and evolution of this critical infrastructure. In this article we provide an alternative vision that of an Open Cloud eXchange (OCX) a public cloud marketplace, where many stakeholders, rather than just a single cloud provider, participate in implementing and operating the cloud, thus creating an ecosystem that will bring the innovation of a broader community to bear on a much healthier and more efficient cloud marketplace

High-Performance Cloud Computing: A View of Scientific Applications

Scientific computing often requires the availability of a massive number of computers for performing large scale experiments. Traditionally, these needs have been addressed by using high-performance computing solutions and installed facilities such as clusters and super computers, which are difficult to setup, maintain, and operate. Cloud computing provides scientists with a completely new model of utilizing the computing infrastructure. Compute resources, storage resources, as well as applications, can be dynamically provisioned (and integrated within the existing infrastructure) on a pay per use basis. These resources can be released when they are no more needed. Such services are often offered within the context of a Service Level Agreement (SLA), which ensure the desired Quality of Service (QoS). Aneka, an enterprise Cloud computing solution, harnesses the power of compute resources by relying on private and public Clouds and delivers to users the desired QoS. Its flexible and service based infrastructure supports multiple programming paradigms that make Aneka address a variety of different scenarios: from finance applications to computational science. As examples of scientific computing in the Cloud, we present a preliminary case study on using Aneka for the classification of gene expression data and the execution of fMRI brain imaging workflow.Comment: 13 pages, 9 figures, conference pape