Economics of Software Reuse and Market Positioning for Customized Software Solutions

Transcription

1 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY Economics of Softwae Reuse and Maket Positioning fo Customized Softwae Soutions M. Rokunuzzaman + and Kiiti Pasad Choudhuy +* * Schoo of Engineeing & Compute Science, Independent Univesity, Bangadesh (IUB), Dhaka, Bangadesh and + Beximco Phamaceuticas Ltd, Dhaka, Bangadesh. zaman.okon@yahoo.com, kpmoni@yahoo.com Abstact Most of the softwae companies can neithe be typica softwae poduct based company ike Micosoft no affod to deveop each customized appication fo individua custome fom cean sate without taking into consideation of euse. Softwae companies ae unde inceasing competitive pessue fo impoving deivey paametes such as cost, quaity, and time. Systematic euse is an oppotunity of continued cost eduction, quaity impovement and ead time eduction in softwae deivey. Systematic euse agey depends on the scope of deiveing customized softwae appications in the same maket segment epeatedy to mutipe customes. Thoough maket anaysis povides basic inputs fo defining geneic poduct concept fo deiveing mass customized soutions. The pobem of estabishing a successfu new business aound a geneic softwae poduct concept is not chaenging because of shotage of ideas, but athe pobems exist in pope anaysis of the maket and adoption of euse capabiity fo continued pice eduction and quaity impovement to dea with evoving maket foces fo deiveing mass customized soutions. This pape, theefoe, suggests the appication of maket positioning stategy to benefit fom softwae euse fo deiveing customized softwae soutions. In this pape, economics of softwae euse has been integated with maket positioning fo deiveing customized softwae soution. It is beieved that such integation wi impove the decision making abiity of softwae pofessionas fo stengthening the capabiity of softwae companies in deiveing customized soutions to taget maket segment by taking the advantage of softwae euse economics. Index Tems-- Softwae euse economics, Softwae maket segmentation, Maket positioning, Poduct-Line appoach, Domain-specific engineeing, Poactive investment and Customized softwae appications. I. INTRODUCTION Softwae deveopment and deivey take pace in an economica context [1]. The economic anaysis shoud be the key of taking softwae engineeing decisions fo deveoping business of softwae deveopment and deivey. The chaenge of deveoping softwae companies is no onge imited to masteing technoogica capabiity ony. The tasks of cafting and executing deivey stategies ae the heat and sou of managing a softwae business and winning in the maket pace. Stategy of deiveing customized softwae soutions at competitive pice appeas to be a key competence need fo deveoping softwae companies. Most of the stat-up initiatives have the temptation to stat the jouney of deveoping softwae companies without taking adequate pepaation of maket undestanding and deveoping the stategy of continuousy impoving the abiity to compete. A company s stategy is the game pan which management appies to stakeout a maket position in taget segment, deive its soutions, and achieve oganizationa objectives [2]. The centa thust of the stategy is undetaking moves to buid and stengthen the company s ong tem competitive position and financia pefomance fo gaining a competitive advantage ove ivas that then becomes a company s stength to achieve above aveage pofitabiity. Systematic euse is an impotant issue in softwae engineeing fo inceasing poductivity and impoving quaity significanty [3]-[5]. Sti today, it is a eseach topic but aeady accepted as a souce of huge benefits, when systematic and discipined appoach is intoduced in the softwae engineeing pocess. Softwae poduct ines [6] ae apidy emeging as a viabe and impotant softwae deveopment paadigm aowing companies to eaize ode-of-magnitude impovements in time to maket, cost, poductivity, quaity, and othe business dives. Softwae poduct ine engineeing can aso enabe apid maket enty and fexibe esponse, and povide a capabiity fo mass customization. Successfu adoption of softwae poduct ine pactice is a caefu bending of technoogica, pocess, oganizationa, and business impovements. Rathe than buiding each customized soution fom the scatch, as is often done today, significant gains ae achievabe by eusing age potions of peviousy buit systems in the domain to constuct new ones. II. SOFTWARE RESUE- A SIMPLE IDEA BUT COMPLEX IN PRACTICE Since the beginning of compute pogamming softwae euse has been pacticed. Reuse of ibaies, domain engineeing methods and toos, euse of design and design pattes, domain specific softwae achitectue, and component based softwae engineeing ae exampes of active aeas of softwae euse eseach. An estabished definition of softwae euse is the pocess of ceating softwae systems fom pedefined softwae components. It is based on a simpe and we-known idea. The most common type of euse is the euse of souce code, but othe atifacts o intemediate wok poducts poduced doi: /jsw

2 32 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY 2011 duing the softwae deveopment pocess can aso be eused. Reusabe softwae items ae caed eusabe assets. These assets may be softwae designs, equiements, test cases, achitectues, modes, design pattens, use cases, code-components etc. Potentia benefits of softwae euse incude educed effot to buid softwae systems, ess time-tomaket, inceased quaity such as obustness and deceased effot equied fo maintaining softwae [1]. Potentia benefit of euse cannot be achieved at the fist poject. It equies ong-tem investment but it inceases company s assets. In addition to deveopment and opeationa benefits, euse may suppot stategic oppotunity to ead the maket, o the fexibiity to espond to competitive foces and changing maket conditions. Softwae euse has quite significant benefits but this simpe idea is quite compex in pactice [6]. It is not enough to gathe inteesting pieces of components into a ibay and offe them to peope to euse. Components have to be caefuy designed and deveoped taking into consideation of commonaity of futue pojects o poducts so that they ae of high quaity and wok we togethe to meet futue equiements. They have to be documented we so that e-uses can undestand them popey. Components have to be caefuy chosen so that this exta investment wi be epaid by significant euse. This stategy woks best when euse takes pace between membes of a poduct ine o poduct famiy [6]. Athough significant pogess has been made ove the decades, many impotant pobems emain to be addessed to incease benefit fom euse. It has been epoted that a key eement in the success of euse and domain engineeing is the abiity to pedict needed vaiations in futue assets [7]. The necessity of invovement of a method fo ceay stating euse contexts and assumptions has been mentioned in eseach epoting [7]. The citica hude of softwae euse appeas to be the justification of capita investment at the beginning of pojects. It is about the isk associated with the euse of assets which ae panned to be deveoped fo futue use. Such isk coud be significanty educed though maket eseach fo estabishing commonaity as we as vaiations of poducts to be aunched customized to equiements of cetain maket segments. The maket anaysis is an oppotunity assessment, which invoves coecting infomation about maket segments and foecasting demands of poducts having cetain attibutes coesponding to diffeent segments. Maket positioning is a pocess in which a company seeks to estabish a definition of its poduct offeings that is consistent with customes needs and pefeences. The pupose of this wok is to addess isk associated with the euse of softwae assets by integating maket positioning with softwae euse pogam to educe associated uncetainties fo maximizing as we as justifying etun on investment equied fo deveoping and using eusabe assets. III. ECONOMICS OF SOFTWARE REUSE Sevea studies have eveaed that systematic softwae euse inceases poductivity and softwae quaity which eads to economic benefits [8]. The fact that euse can be justified fom an economic pespective which has ed to the deveopment of an aay of economic mode of softwae euse. These economic modes pimaiy focused on estimating benefits if euse takes pace. Moeove, deveopment of eusabe assets equies additiona costs that ae difficut to justify fo a standaone poduct o unde a singe-poject management view. Since euse benefits accue ove mutipe pojects o a poduct ine, economic modeing fo management decision making shoud shift to ong tem view ove a poduct ine o mutipe pojects. In paticua, given scae esouces management needs to be abe to assess whethe softwae euse wi have kind of etun that justify up-font investment in easonabiity [9]. In this section, basic economic mode of softwae euse is stated, which basicay has been adapted fom pevious studies. The foowing section integates this mode within the context of maket segmentation and positioning fo making upfont investment and eaizing economic benefit fom euse though deivey of customized soutions to each sub-segment of the taget maket segment. Let us conside that a softwae appication is composed of m numbe of components. The eusabiity takes pace at the component eve. That means deveopes take the decision whethe a component shoud be eused fom existing ibay o to be deveoped fom scatch. The net deveopment cost savings S fom the euse of component ibay is estimated by the foowing equation [9], n n S ( CN CCR ) C PR A i i (1) i1 = numbe of poducts shaing eusabe components. C Ni = cost to deveop poduct i without euse. C CRi = cost of ceating poduct i with euse. C Ni -C CRi = expected poduce s cost saved fo poduct i. C PR = expected cost that the poduce incus in poducing the eusabe components. A = euse-specific ovehead and setup costs incued by the famiy of poducts. The incopoation of the uncetainty as to whethe the component wi indeed be eused equies that the pobabiity of each euse instance shoud be estimated to compute the expected consume savings. The mode then becomes, n S ( C i1 Ni C CRi ) pi C PR A, p i = pobabiity that euse instance i wi be actuaized. (2)

3 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY The objective of this eseach is to incease this pobabiity of euse and the numbe of poducts which wi be eusing them fo maximizing cost savings. The expected benefits may have the impact on othe aspects of uncetainty such as deveopment cost saving, which depends on whethe the deveope takes advantage of back box euse oppotunities o modifies the component. In such situation, the pobabiity deveope wi opt fo back box o fo white box euse woud need to be assessed in ode to estimate the expected deveopment cost savings. IV. ECONOMICS OF REUSE IN DELIVERING CUSTOMIZED SOLUTIONS Athough technoogies fo softwae poductivity impovement by taking the advantage of euse though domain engineeing stated to appea in eay 1980s, appication of these technoogies in individua settings and stoies of success have ony been epoted in ecent past[7]. It has been obseved that maket demands inceasing poduct vaiation and shote intoduction time of softwae intensive soutions [10]. These two tends cash, uness we ae abe to euse softwae. Poactive poduct ine appoach inceases systematic softwae euse. These poduct ines ae setup to ceate a famiy of poducts, and they ey on a pio anaysis of commonaities and diffeences of the membes of the famiy. The commonaities ae embodied in an ovea achitectue, whie the diffeences esut in vaiation points. Offeing of customized soution o individua poduct to each sub-segment of the taget maket esuts in fiing vaiation points. Upon caefu maket anaysis, poduct ine achitectue coud be conceived to ceate softwae components with expicit context dependencies and vaiation points, which then can be combined in diffeent ways into poducts customized to the equiement of each sub-segment of the maket. The bending of maket segmentation with component based softwae engineeing as a stategy fo maket positioning is an oppotunity to maximize pofit fom softwae euse. It is conceived that a softwae company has a ibay of components having the potentia of being eused. The deveopment cost saving C s of deiveing a customized soution by making use of this eusabe ibay is poposed to be estimated by the foowing equation, m o c i C s cn ( ci ) i i (3) i1 i1 ni m = size of the appication in numbe of components. c ni = cost of new deveopment of the component i. o = numbe of components ae eused. c i n i = cost of deveopment of eusabe components. = numbe of customized deivey wi be using a eusabe components. ci i = cost of integation of a eusabe component i. If the vaue of n i is inceased, the cost of a eusabe component i deceases o the benefit fom this component inceases. Theefoe, the cost of deivey of a customized softwae soution accoding to Eq. (3) depends on both individua eused component specific n i and tota numbe of eused components, o. On the othe hand, ovea cost savings S fom euse accoding to Eq. (1) aso depends on numbe of deiveies which ae making use of eusabe ibay. Theefoe, it coud be stated that we need to figue out means to incease vaues of n i, n, and o fo minimizing the cost of customized appication deivey by taking the advantage fom euse. Ou poposed appoach of maket segmentation and positioning in the taget maket fo epeated deivey of customized softwae soutions by making use of a component ibay has the capacity to incease vaues of these thee impotant vaiabes: n i, n, and o. V. MARKET SEGMENTATION AND POSITIONING OF CUSTOMIZED SOFTWARE APPLICATION DELIVERY The maket consists of many types of customes, poducts, and needs, and the makete has to define which segments offe the best oppotunity fo achieving company objective [11]. The pocess of dividing a maket into distinct goups of buyes with diffeent needs, chaacteistics, o behavio who might equie sepaate poducts is caed maket segmentation. Afte a company has defined maket segments, it can ente one o many segments of a given maket. Maket tageting invoves evauating each maket segment s attactiveness and seecting one o moe segments to ente. Maket positioning is aanging a poduct to ente and expand in the taget maket segment. Poduct diffeentiation is the pocess of distinguishing a poduct to make it moe attactive to the taget maket segment. Diffeentiation is a souce of competitive advantage. In economics, successfu poduct diffeentiation o customization eads to monopoistic competition. Cost of diffeentiation is usuay high fo deveoping each diffeentiated poduct fom cean sate. Softwae maket segmentation is the division of a maket into diffeent goups of customes with distincty simia, not the same, needs and softwae soution equiements. It is about the division of a mass maket into identifiabe and distinct goups o segments, each of which have common chaacteistics and needs and dispay simia esponses to cetain softwae soutions. The pupose of maket segmentation is to eveage scae esouces. Positioning is about the design and attibutes of a poduct and its offeing in the taget maket segment. In ode to continuousy incease the competitive stength in the taget maket segment, a softwae company needs to continuousy find means of impoving quaity, educing cost and oweing time of deivey. It appeas that mass customization in deivey of softwae soution to a simia goup of customes of the taget maket segment such as hospitas and cinics appeas to be a equied stategy to stengthen the maket position. With a poduct ine concept, a fim fagments its taget maket segments into sub-segments that it seves

4 34 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY 2011 sequentiay [12]. To begin with it has been assumed that a softwae company has enteed the taget maket segment with a basic soution. Let us deveop a simpe mode by consideing ony two types of customes in that taget maket segment. Faction A of customes have high vauation and the faction 1-A have ow vauations of the same basic soution. High and ow vauation customes vaue an undiffeentiated vesion of the poduct v h and v <v h pe peiod. The atio of v h /v wi be intepeted as a measue of the pice pemium that the high segment is wiing to pay eative to the ow one. Both the fim and the consumes ive foeve and have a discount facto (t). Customes wiingness to pay p(t) fo the undiffeentiated poduct keeps decaying ove time as shown in the foowing eationship [12], vc p( t) c, h (4) 1 ( t) Let us take an exampe of the enty of a softwae fim in the machine vision based textie defect detection softwae [13] maket segment of Bangadesh. It is to be noted that Bangadesh has a age textie industy with expot of moe than US$ 12 biion. In this industy, amost 3 to 5% fabics is wasted due to the pesence of undetected defects. It is estimated that amost US$200 miion coud be saved pe yea by impoving textie defect detection accuacy by intoducing machine vision based defect detection softwae soution. The company has deveoped basic vesion of the softwae which can dea with imited vaiations of eevant paametes such as ighting, coo, textue, speed, etc. Ony a sma faction of companies of the taget maket segment wi be taget buyes of this basic softwae of imited capabiity. And highy ikey it wi not be feasibe fo this company to ean expected pofit by deiveing this softwae to this sma faction of the taget maket. Due to the enty of competitos, the wiingness to pay fo this basic softwae wi be ikey deceasing ove time as stated in Eq.(4). Moeove, due to the vaiation of fabics which diffeent textie mis ae poducing the softwae shoud be customized to meet thei equiements. Such heteogeneity of equiements, imitation of wiingness to pay, and competitive pessue fo diffeentiated softwae soution to meet vaying equiements have endeed isoated design and poduction of individua softwae soutions essentiay obsoete. Acoss industies, standad pactice invoves ines of poduct vaiants that educe cost via economies of scae and scope fo eaching mutipe maket segments. In softwae industy it is about the euse of softwae components. Softwae components which ae deveoped the basic vesion coud be eused fo deveoping diffeentiated soution customized to the equiements of each sub-segment fo benefiting fom economies of euse as stated in Eq.(1)-Eq(3). The deveopment stategy fo enjoying economies of euse fo offeing customized soution to each sub-segment of the taget maket segment focuses on the tadeoff between inceased commonaity among these customized soutions and the esuting decease in the abiity to meet distinct pefomance tagets fo each soution vaiant. Let us now investigate how euse stategy hep this softwae company to deveop eading position in this maket segment. Basic softwae sub-system of this softwae ae (1) Image captuing, (2) Image pocessing, (3) Featue extaction, (4) Cassification, (5) Making decision about defects. The objective of each of these modues o subsystem is to find a feasibe design that exhibits poduct attibutes matching the tagets set duing maket positioning as cosey as possibe. Hee the vecto of poduct attibutes Z j fo poduct j epesents a set of objective, measuabe aspects of the poduct, obsevabe by the custome, esuting fom engineeing design decisions. In each engineeing design subsystem j, seach is conducted with espect to a vecto of design vaiabes x j, which epesents decisions made by the designe that ae not diecty obsevabe by consumes but that effect the eusabiity of components of that system fo deiving subsequent diffeentiated soutions meeting customized equiements of othe maket sub-segments. Theefoe, in ode to benefit fom softwae euse economics design decisions to be made fo the design of the cuent soution to be inked with the maket segmentation and positioning stategy. The maket positioning objective is to maximize pofit with espect to the pice which is chageabe fo each diffeentiated o customized soution saes which coud be made in each sub-segment, and the cost of deveoping each customized soution. Athough fims can specify abitaiy sophisticated pofit functions based on thei expeience, intena accounting and histoica demand, we popose to use a simpe pofit fomuation based on evenue minus cost of each customized soution in the fom of foowing equation: N M P ij C i N M N p ij C i i1 j1 i1 = numbe of sub-segments of the taget maket segment. = numbe of taget customes o potentia saes in each sub-segment. = pice which coud be chaged to a custome of each maket segment. = the cost of deveoping each customized soution tageting the ith maket segment. It coud be easiy stated that thee is a stong eationship between Eq.(1), Eq.(2), and Eq.(3). Design decisions which ae taken in customizing soution fo a paticua maket segment shoud be taken fo maximizing the euse of newy deveoped components in deveoping soutions customized to othe maket subsegment as we. Such decision wi have significant impact on impovement of tota savings fom eusabiity as stated in Eq.(1), eduction of cost of poducing each sub-segment specific customized soution as stated by Eq.(3) and maximization of the pofit by deiveing customized softwae soution to each sub-segment of the (5)

5 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY taget maket as stated by Eq.(5). Fom such obsevations, it coud be concuded that thee is a stong eationship between maket positioning stategy and benefiting fom softwae euse. Theefoe, softwae design decisions shoud be stongy inked with the maket segmentation and positioning stategy. It shoud be noted that the utimate pupose of domain engineeing, softwae poduct ine and systematic softwae euse is to impove the quaity of the poducts and sevices that a company povides and, theeby, maximizes pofit [7]. Despite the eaity that softwae euse wi ony succeed if it takes good business sense, vey often softwae engineeing decisions oses sight of this goa when consideing the technica chaenges of softwae euse. The cost fo evoving eusabe softwae assets and etofitting customized o diffeentiated soutions with new assets can be high. Thee is a need of making upfont investment fo buiding eusabe components. Thee ae many options fo the management fo aocating capita by an oganization to maximize etun to shaehodes. It has been epoted that softwae euse wi ony be chosen fo investment if a good case can be made that it is the best atenative choice fo use of capita[7]. In the copoate envionment, the impementation of a euse pogam equies a decision about when and a capita investment is to be made. Deveopment of eusabe assets equies a capita investment and thee shoud be a stategic decision as to whethe investment wi be made poactivey o eactivey. And this investment shoud be made at the beginning of deveoping a softwae business poposition tageting paticua maket segment in a poactive manne. Poactive investment stategy fo softwae euse anayzes the taget maket segment, conceives poduct ine, and defines achitectues; then eusabe assets ae designed and impemented by taking foeseeabe poduct vaiations into account. Such appoach tends to equie a age upfont investment, and etuns on investment can ony be seen aong with the pogession of positioning in the taget maket segments. This appoach is suitabe fo oganizations that can pedict thei poduct ine equiements we into the futue. It is obvious that thee is an investment isk with this appoach due to uncetainty associated with the vaiations of poduct ine equiements. This isk coud be minimized by inking softwae euse stategy with the maket undestanding, suitabe maket segment seection, and deveoping positioning stategy. It is beieved that the integation of softwae euse economics with the maket segmentation and position stategy estabished in this pape has the potentia to enabe softwae enginees to deveop convincing softwae euse based stategic maket position at the vey beginning of softwae deveopment. As a esut, capita wi be aocated fo aigning design decisions aong maket positioning stategy fo deiveing customized soution to each sub-segment fo enjoying cost and quaity benefits fom softwae euse fo maximizing pofit of the company. VI. PRODUCT LINE MANAGEMENT FOR CUSTOMIZED DELIVERY OF SOFTWARE SOLUTIONS This section geneaizes concepts as pesented in pevious sections of benefit maximization fom softwae euse though integation of softwae engineeing design decisions with the maket undestanding, segmentation and positioning issues. A successfu poduct ine design fo maximizing benefit fom softwae euse shoud have a vey cose coodination between maketing and engineeing teams in baancing the inevitabe tadeoffs. Poduct ines that evoves as optima fom maketes pespective may not be optima fom an engineeing viewpoint, and vice vesa [14]. In the design of a poduct ine, maketing and engineeing consideations ae highy intedependent with a stong infuence to eusabiity of softwae assets. Heteogeneous poduct equiements by diffeent subsegments of the maket shoud be taken into consideation fo eveaging the potentia cost synegy fom euse acoss poducts o customized soutions in the poduct ine. These highy inteconnected eationships between the two domains detemine that any equied action in one domain can potentiay infuence the outcomes in the othe domain. Theefoe, fo the design of an optima o nea optima poduct ine, the maketing and engineeing equiements cannot be pusued sepaatey o even sequentiay. Despite the compeing need fo a unified famewok that integates the softwae design consideations fom both discipines concuenty fo inceasing economic benefits fom softwae euse thee has been vey imited knowedge about it in the softwae engineeing iteatue. And fo this eason, we popose that maketing issues shoud be integated in softwae design fo taking design decisions that not ony deive desied customized poduct fo paticua sub-segment, but aso takes into consideation of the evenue and cost inteactions acoss poducts in the poduct ine fo maximizing economic benefit fom softwae euse. Basic concept of this unified famewok is depicted in Fig. 1 fo a poduct to meet 5 poduct equiements by choosing design options fom a set of 6. Seection of a design option has an impication on both poduct attibutes as we as eusabiity of softwae components. A cose mapping shoud be done between poduct attibutes and design option in ode to maximize pofit seving a sub-segments of the maket. Poduct equiements x 1 x 2 x 3 x 4 x 5 y 1 y 2 y 3 y 4 y 5 y 6 Designe options Fig. 1: Mapping fom design options to poduct equiements

6 36 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY 2011 Within the context of customized softwae deveopment by taking advantage fom eusabiity, we expect that designe wi choose a design option fom a set of avaiabe ones to maximize eusabiity. Remaining in ine with Eq.(1), the cost eduction due to softwae euse by taking advantage of commonaity among poducts of the poduct ine can be geneaized by taking into consideation of discounted facto by the foowing eationship [15]: 0 No commonaity among poducts sh (6) Othewise L When thee is no shaing of the component among the poducts o sub-segment specific customized soutions, the discount facto is zeo. The commonaity significance facto epesents the degee of cost savings by shaing the th softwae component in the poduct ine. L epesents the tota numbe of poduct o customized soutions and sh epesents numbe of poducts that ae shaing the th component. When a the poducts of the poduct ine ae shaing the same component, the discount facto equas to the coesponding commonaity significance facto. Othewise, the discount facto is a potion of commonaity significance facto depending on the degee of shaing of the paticua component in the poduct ine. As evident when the degee of component shaing inceases among the poducts in the poduct ine, the cost of poducing each customized poduct meeting equiements of the coesponding maket segment deceases. The evenue mode is an impotant facto to conside in designing the oadmap of aunching one afte anothe poduct customized to each sub-segment of the maket. The pimay focus of ou evenue mode is to pedict the expected evenue of each poduct ine candidate [16]. In this mode, we take into account the potentia cannibaization among the poducts in the poduct ine as we as the effect of competitive offeings. Like most of the poduct ine evenue modes, we stat with pediction of the expected maket shae fo each poduct in the poduct ine. Given that one of the essentia issues in poduct ine design is to accuatey foecast the maket shae of each poduct in the poduct ine, we specificay account fo the inheent vaiations in the poducts utiity estimates in maket shae pediction. The expected poduct ine evenue can be estimated as[16] E() E(MS ) p L E( ) [ E( MS ) p ] (7) 1 = expected evenue fom the poduct ine. = expected maket shae of the th poduct. = unit pice of the th poduct. = size of the maket sub-segment coesponding to th poduct. We have assumed that the taget maket segment has been divided into L sub-segments. Duing the panning stage, we popose to anayze commonaity and vaiations of softwae poducts to be aunched customized to each of these L sub-segments of the maket. Based on the commonaity, investment is ecommended to be made in the softwae eusabiity pogam fo minimizing cost of each poduct customized to coesponding maket subsegment. The expected maket shaes depends on the size of each sub-segment as shown in Eq.(7). Expected maket shae aso depends on the utiity and pice of competitos offeings and scope of maket expansion. Poduct ine optimization seaches fo a pofitmaximizing by simutaneousy integating the design options, customes equiements, evenue, and cost into an optimization mode. Mathematicay, this poposed optimization pobem to be expessed as foows: max y n E( ) { y1, y2,..., yn} 1 (8) = a set of design options fo deaing with commonaity and vaiations of the softwae poduct to deive benefits fom euse. E ( ) = expected pofit. L [ E( MS ) ( p VC ) ] FC VC = vaiabe cost of each poduct ine. FL L = the fixed cost of the poduct ine. As shown in the Eq.(8), the optimization pobem aims to taget to seect designes options having infuence on eusabiity and poduct attibutes of each poduct of the poduct ine to maximize fim s expected pofit subject to a set of constaints. Within the context of maximizing benefits fom eusabiity such constaints wi be guided by the set of commonaity and vaiations of the set of poducts of the poduct ine. The upfont cost fo the eusabiity pogam coud be factoed in the fixed FL of Eq. (8) of the poduct ine. The cost associated with the euse of existing components and cost fo poduct specific to new components in deveoping customized vesion of the poduct fo each maket sub-segment coud be incuded in VC of Eq.(8). The vaue of VC wi agey depend on the discounted facto as defined in Eq.(6), which is agey detemined by the eusabiity eve. It has been epoted that thee is a gowing impotance of poduct customization capabiity deveopment among fims to compete in maket segments scope of diffeentiation is high [17]. It is widey beieved that softwae component in industia as we as consume poducts has been gowing in apid space [10]. Theefoe, softwae euse stategy coud be an impotant capabiity fo not ony softwae fims but aso fo softwae intensive poduct fims fo educing cost of deiveing diffeentiated poducts customized to each maket segment. L

7 JOURNAL OF SOFTWARE, VOL. 6, NO. 1, JANUARY VII. SUMMARY & CONCLUSION Since the beginning of pogamming softwae euse has been of inteest because peope want to buid softwae soutions that ae bigge, moe eiabe, ess time consuming, ess expensive, and that ae deiveed on time. Athough this is a simpe idea and benefits ae ceay visibe once successfu euse of softwae assets deveoped in past pojects is made in cuent pojects. Despite the simpicity of the idea and visibe benefits, systematic euse as a stategic capabiity to dea with eve-gowing compexity and divesity in poducts, and decease in ead time has not been eaized with mass satisfaction yet. The key botte neck appeas to be the abiity to pedict commonaity and vaiations in poducts to be offeed to justify poactive investment fo eusabiity pogam. In this pape, we have pesented the concept of integation of engineeing design decisions with maket segmentation and position stategy fo inceasing this pediction abiity. Limitation of this wok is that futhe deveopment of this concept is equied with the suppot of empiica investigation to offe scientific foundation fo decision makes to make poactive investment fo stategic use of softwae eusabiity to deive softwae o softwae intensive soutions customized to each sub-segment of the taget maket. It is beieved that such deveopment wi significanty hep softwae and softwae intensive poduct companies to dea with eve-gowing chaenges of compexity, divesity, ead time, and cost though softwae euse stategy. It appeas that integation of euse concept with maket positioning is vey much a new concept. Thee is an immediate need fo this type of eseach fo maximizing benefit fom softwae euse. [9] R. Maan, and Kevin Wentze, Economics of Softwae Reuse Revisited, Hewett-Packad Company, [10] R. v. ommeing, Softwae Reuse in Poduct Popuations, IEEE Tansaction on Softwae Engineeing, vo. 31, np. 7, pp , [11] G. Amstong and P. Kote, Maketing: An Intoduction, Sixth Edition, Peason Education Sevices, Inc, [12] Pasca Couty, Some Economics of Poduct Line Management, Depatment of Economics and Business, Univesity Pompeu Faba, Spain, Novembe 20, 1998, [13] M. Saauddin and M. Rokonuzzaman, Adaptive Segmentation of Knit Fabic Images fo Automated Defect Detection in Semi-stuctued Envionment, The Poceedings of the 8th ICCIT Confeence, 2005, pp [14] Jiao, Jianxin and Yiyang Zhang, Poduct Potfoio Panning with Custome-Engineeing Inteaction, IIE Tansactions, 2005, vo. 37, no.9, [15] Luo, Lan, P.K. Kannan, Babak Beshaati, and Shapou Azam, Design of Robust New Poducts unde Vaiabiity: Maketing Meets Design, Jouna of Poduct Innovation Management, 2005, vo. 22, no. 2, [16] L. Luo, B. Beshaati, P. K. Kannan, and S. Azam, Poduct Line Design fo Consume Duabes: An Integated Maketing and Engineeing Appoach, Woking Pape, 2008, U.S. Nationa Science Foundation though Gant Numbe DMI [17] D. Benhadt, Q. Liu, and K. Sefes, Poduct Customization, Euopean Economic Review, vo. 51, pp , REFERENCES: [1] K. Schmid and M. Veage, The Economic Impact of Poduct Line Adoption and Evoution, IEEE Softwae, vo. 9, no. 4, pp.50-57, [2] A. A. Thomson, J.E. Gambe, and A.J. Stickand, Stategy: Winning in the Maket Pace, McGaw Hi, [3] M. Moisio, M. Ezan, and C. Tuy, Success and Faiue Factos in Softwae Reuse, IEEE Tans. Softwae Eng., vo. 28, no. 4, pp , [4] Mohagheghi P, Conadi R, Kii OM, and Schwaz H, An Empiica Study of Softwae Reuse vs. Defect-Density and Stabiity, 26th Intenationa Confeence on Softwae Engineeing (ICSE 04).H. Poo, An Intoduction to Signa Detection and Estimation. New Yok: Spinge-Veag, [5] T. Menzies and J. S. Di Stefano, Moe Success and Faiue Factos in Softwae Reuse, IEEE Tansaction on Softwae Engineeing, vo. 29, no [6] K. Poh, G. Bocke, and F. v.d. Linden, Softwae Poduct Line Engineeing; Foundations, Pincipes, and Techniques, Spinge, [7] W. B. Fakes and Kyo Kang, Softwae Reuse Reseach: Status and Futue, IEEE Tansaction on Softwae Engineeing, vo. 31, no.7, Juy 2005, pp [8] P. Mohagheghi and R. Conadi, Quaity, Poductivity, and Economic Benefits of Softwae Reuse: a Review of Industia Studies, Jouna of Empiica Softwae Engineeing, vo. 12, 2007, pp