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The Business of Software

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The Business of Software

What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad

Free Press,

15 min read
10 take-aways
Text available

What's inside?

Becoming a software tycoon isn't as easy as it once was. Entrepreneurial focus and a great idea are just the beginning.

Editorial Rating



  • Innovative
  • Applicable


Even after the dot-com boom and bust, software remains the business world’s glamour industry. In this insightful study, professor and industry expert Michael A. Cusumano skips the glitz and goes straight for the nuts and bolts. The result is a clear rendering of exactly what makes one software firm hit it big while dozens of others go broke. Despite a slight, occasional tendency to sound academic, Cusumano really explains why a well-run software company can be a gold mine. He carefully covers the best practices in the software development industry in depth and offers plenty of real-world case histories to add juice to what could have been a dry recitation. He even explains why you have to hold on so long when you call a mass-market software firm’s toll-free number. getAbstract recommends this detailed book to software pros seeking insight into their industry, as well as to investors and to those who like inside stories about entrepreneurial adventures.


Perceptions of the Software Industry

Software is one of the few unique industries in the business world. For starters, its visionaries often set out to change the world – and succeed. For instance, as far back as the mid-1970s, the founders of Microsoft Corporation looked at the future expecting to see personal computers in every home and office, and also expecting to see their software running those PCs. Moreover, the software industry ultimately sells little more than binary zeros and ones that tell computers what to do. Unlike traditional companies in the manufacturing and service sectors, software firms spend about the same amount of money to sell one version or a million versions of their products. Companies that are founded to make and sell products invariably morph into service companies. And in what other industry would companies rush products onto shelves in spite of known flaws?

While the American software companies are the best known, it’s instructive to look at the software cultures in other places. In Europe, for example, software is considered a science. This viewpoint leads companies such as Germany’s SAP to create complex, intricately detailed applications...

About the Author

Author Michael A. Cusumano is the Sloan Management Review Distinguished Professor at the Massachusetts Institute of Technology’s Sloan School of Management. A leading expert on the software industry, he wrote the bestsellers Microsoft Secrets and Competing on Internet Time. His other titles include Japan’s Software Factories and Platform Leadership.

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