Gio Wiederhold
Abstract
By applying well-known principlesof intellectual property valuation,sales expectations, growth of maintained software, discounting to present value, and the like, a method is presented for valuingsoftware based on the income that use of the softwareis expected to generate in the future.
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Index Terms
- What is your software worth?
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Reviews
Shantanu Bhattacharya
Software valuation is a complex task, since it involves the software's perceived value in the market, and the amount of returns the purchaser sees due to its usage. This article effectively and thoroughly covers some aspects of software valuation. Wiederhold discusses software valuation based on the size of the software, the functionality presented in the first version, and upgrades and maintenance. Some interesting facts about the relationship between the source lines of code (SLoC) and intellectual property (IP) value are mentioned. Software valuation also involves calculating the revenue generation potential of the software, which again depends on the window of opportunity and revenue gain brought by the software to the purchaser of the software. Often, this aspect is much more of a driving force than the SLoC and their relationship to the IP value. That is due to market forces being too dominant in deciding the valuation, and valuation being done at a time when the software is not yet ready. The cost of a software product often needs to be determined before its development, to determine its market potential. Online Computing Reviews Service
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