Software economics: status and prospects

Software is valuable when it produces; information in a manner that enables people and systems to meet their objectives more effectively. Software engineering techniques have value when they enable software developers to build more valuahle software. Software economics is the sub-field of software engineering that seeks improvements which enable software engineers to reaso:n more effectively abou t important economic aspects of software development, including cost, benefit, risk, opportunity, uncertainty, incomplete knowledge and the value. of additional information, implications of competition, and so forth. In this paper, we survey the current status of selected parts of software economics, highlighting the gaps both between practice and theory and between our current understanding and what is needed.