Book Review
Department Editor: Warren Keuffel, wkeuffel@computer.org
Managing the Software Business: The Pragmatic View
Yukika Awazu and Kevin C. Desouza
The Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad,
Michael A. Cusumano, Free Press, 2004, 352 pp., ISBN 0-7432-1580-X, US$28.00
T
he Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad is an excellent book on the economics of building, running, and managing a software organization. We have to say this is one of the best books written on the strategic issues of building a software organization and the strategic aspects of managing software. Author Michael A. Cusumano must be commended for putting together a logical, easy-to-read, and illustration-rich text. The book covers some of the most pressing and important topics of the software business, such as the difference between product and service strategies, market segmentation issues, outsourcing, project management, and the software development process.
Cusumano organized the book into seven chapters. Chapter 1 looks at how the software business is perceived differently across Europe, Japan, and the United States. Each point of view has its positives and negatives, and Cusumano describes these accurately and without bias.
Chapter 2 describes how to think strategically about software, detailing the difference between product and service approaches. Cusumano rightly argues that no business can be on either extreme of the product-service range; instead, the successful software business will strike the right balance between the two—a hybrid model. He also provides a vivid discussion of the concepts of product and market segmentation.
Chapter 3 is a bit dry, but as Cusumano argues, drawing lessons from insights into the history of the software business will help us chart a more successful future. In this chapter, you can develop an appreciation for the software business from IBM’s early days to current happenings such as open source software.
Chapter 4 looks at the problems you can encounter when developing software: issues of project and knowledge management. In addition, Cusumano elaborates on his previous research on Microsoft, which focused on how the “synch-and-stabilize” model is apt for managing software development. In our opinion, Chapters 2 and 4 are the most interesting reading material.
Chapter 5, which covers software entrepreneurship, is a must read for any venture capitalist looking to fund a software business. Cusumano answers the question, “What should you look for in a software start-up?” with eight key points that a software entrepreneur and venture capitalist should bear in mind.
Chapter 6 provides a rich collection of case studies on software product start-ups, service start-ups, and hybrid start-ups. Chapter 7 wraps things up with a look at idealism versus realism in the software business.
O
verall, The Business of Software is a highly interesting book that should be read by all software engineers, managers, and venture capitalists who would want to support a software business. It’s sad that this book wasn’t around before the dot-com bubble burst; many of the failed software businesses could have learned a lot from it.
Yukika Awazu is a senior research fellow at the Institute for Engaged Business Research, a think tank of the Engaged Enterprise. Contact her at awazu@engagedenterprise.com.
Kevin C. Desouza is the director of the Institute for Engaged Business Research, a think tank of the Engaged Enterprise . Contact him at desouza@engagedenterprise.com.
