The Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad Hardcover – March 15, 2004

Cusumano keeps surprising me with the timeliness of the books that he has published during the years. Back in 1995 I was head of development for a software company and once I got hold of his book "Microsoft Secrets: How the world's most powerful software company creates technology, shapes markets, and manages people" I became a believer in Cusumano's work. The follow-up work from Cusumano and co-writers have become part of my software engineering and software business library. The last work from Cusumano "The Business of Software: ..." is very timely as software market is evolving rapidly towards commodity business where end user organizations expect to buy and pay for software based on different grounds and premises than before.Cusumano's book reflects on many hot topics that EVERY software executive should be aware of like different software business models with corresponding economic metrics, setting up market segmentation with predictable revenue models, best practices in software development, outsourcing to low-cost countries like India and China etc. Also, Cusumano discusses thoroughly about software entrepreneurship and issues when setting business strategy and what impact venture capitalists could have for a software vendor. I believe that many software organizations do not understand what it really means to be run by venture capital driven Board of Directors. According to the ten case studies outlined in his work, some healthy software companies were pretty much destroyed by VC's and this is certainly not something that one should want to happen. Cusumano lists eight points that one should look at when evaluating software businesses. This was very helpful for me to reflect on and see how my company rates when evaluated against these eight points.This book should be read by EVERY software executive that wants to be updated of what is going on in the software business. This is one of the very few available books that specifically address the needs of a software businesses and this makes this book even more valuable. Cusumano outlines ten different case studies in his book, some complete failures and some successful and each and every one of these case studies have a lesson that we should learn from. We seem to think that we have seen it all, but the best way to learn is to learn from mistakes and never repeat these mistakes. Unfortunately we tend to forget this rule and I have decided long time ago to learn from others and then apply this knowledge in my own software business. I have introduced several successful products by remembering this rule. I also recommend you to read other books from Cusumano and the experiences that he shares from tens of different businesses.

This book was part of a course that several friends took at MIT Sloan. I bought it when I started a role and needed to beef up my software knowledge. I think that Michael, the author, really understands the software business. It was a well-written book and very educational. That said, it doesn't really come to mind when I'm recommending my favorite business books to anyone - so it wasn't incredibly memorable for me.

If you are in the business of software, or planning to develop any software and selling it, this is a great way to know on what you are getting into. I run a Entrepreneur style Software Business company in Honduras, Central America, and this the book has clear my mind about alot of things that everyone inside the SW business should know. Basically the book covers this topics:-Strategic thinking for the SW Business: great chapter with a big scope on what is a SW strategy and how does it work.-History of SW business: it gives a good reference about the different trends the SW industry has gone through.-SW Business for entrepreneurs: he gives a 8 points frame to be aware of.-Start-up cases: he shows the different strategies that companies have used and about the output they have gotten, and everything under sight of the 8 points frame.

This book offers some good perspectives on software companies, but I was shocked and disappointed with a glaring omission - software as a service (SaaS). This book points out that one of the critical decisions of a software company is between a product company (that sells a product) and a services company (one that provides consulting and/or custom development work). Product companies are generally more profitable (in good times) because they have lower marginal costs. Service companies are more steady, and thus easier to keep profitable in difficult times. It would appear that SaaS has the best of both worlds and the worst of neither. The "Best Practices" chapter is fairly weak, failing to identify agile development, and capturing only the continuous integration aspect and calling it "sync and stabilize". I realize the book was written in 2003, but the agile Manifesto was signed in 2001, and there were already many companies selling SaaS by 2002.

A concise perspective on the major decisions that confront every software business. As the CEO of a software startup, I found Dr. Cusumano's work insightful yet obvious (in the way of Dale Carnegie's How to Win Friends and Influence People). We all can learn something from this book. I was particularly struck by the discussion on the tension between a "software" company and a "services" company, which is something that we struggled with mightily and after much debate arrived at the same conclusion that Dr. Cusumano so eloquently lays out. If only I had read this book a year ago! This is a must read!

I like very much the approach of the author, showing many software-related aspects of the technology business and relating many of them to the services component needed for it. Also there is a very good chapter that I think is very helpful for entrepeneurs that covers various important points for software start-ups. There is only one point missing for me: software appliances and the use of a 'hardware approach' to sell software. However, a very recommendable book.

I found well rounded advice to questions on SW operations and strategy development I have in the business I run. Great work!

It's quite good but the final is a little boring with so many examples of startups, plus it's very outdated.