Software Economics.pdfVIP

Software Economics Barry W. Boehm and Kevin J. Sullivan University of Southern California and University of Virginia boehm@; sullivan@V December, 1999 I. Introduction Rapid, sustained advances in computing and communications are now enabling the incorporation of high-speed, low-cost, distributed information processing capabilities into technology components and system of all kinds, at all scales. This trend promises to provide enormous benefits by enabling new functions and improving the performance of existing functions. The potential for value creation is seen to be so great that it is driving information machinery into essentially all serious social, business, and military human- machine systems: appliances, homes, communities, industries, research activities, armies. The results will transform society. Although hardware production is the catalyst, it is the software that embodies new value added functions. Software thus takes on a critical new level of economic and social importance. This role is reflected in demand that far outstrips our production capacity [PITAC, 1999], in world-wide expenditures on software now estimated at US$800 billion annually [Boehm Sullivan, 1999], and in many other aspects of the modern economy. Yet, as the importance of and our dependence on software grows, there is a new awareness that its production and use of are among the most complex and problematical aspects of modern technology development. The symptoms are clear . Large projects fail at an alarming rate, for example. The resources invested in failed projects has been estimated at $85 billion for U.S. business in 1998 alone [Business Week, 1999]. Project, program, and business failures are inevitable, even desirable, in an efficient marketplace. However, problems in