Software Development Business (Essay Sample)

Introduction
Development of a software business over the years have taken a center stage due to the emergence of information technology and communication. Software businesses have profound implication to not only to the producers of softwares but also to the ultimate users. Many of the softwares companies are now shifting from selling of software products to offering of the services, this is due to the reduction of software sales. To break even in recouping investment and generating revenues most software business prefer offering software services that only requires upgrades. The companies involve in making software’s are guaranteed of making profit due to the payment made by the users which covers technical software, patches or upgrades. In recent times there is an increase in products sales on gaming sales especially online gaming. There are many factors that affect software in its quest to achieve their economic goals. Such factors encompass the pricing model, marketing strategy, business model
Pricing model
The entry of open software led to declining prices of software’s these wasn’t made better by the internet that is regarded as the accelerating factor for this trend. Suffice to say that most of the users prefer these software’s as compared to the already existing software products. That is one of the reasons why most of the companies are now investing in software as a service than software as a product. Take for instance Google, yahoo and Microsoft both have produced products such as such engines as a free service unless a user click on an advertisement that is when the software vendors are paid. As competition of software vendors intensifies, most of these companies find it hard to attract and retain new companies due to the upsurge of free source software, they have no alternative but to either lower their prices or shift to offering services and the latter seem the better option for most companies
Opportunity as an entrepreneur
Buchanan and Vanberg (1991) divided the market process in three views that is allocative, discovery and as a creative process and it is imperative to understand what entrepreneurship opportunity is. This is because market process and entrepreneurship are intertwined in creation of goods and services. Entrepreneurship opportunity consists of inventions, beliefs of those invention and action that are taken geared towards achieving the set up goals. The market can be seen as a creative process for instance when entrepreneur are able to create a new product without necessary knowing the market, Sarasvathy (1998) concurred with these notion suggesting that entrepreneur not only disregard the fact there is a possibility of not having market for a given innovation or idea. They only express their belief of getting market for their innovation. These views are clearly and explicitly demonstrated in the innovation of software products. It is pivotal to note that for every invention there must be a gap or opportunity that has been established by the entrepreneur.
However, there is a need to acknowledge the fact sometimes there is an existence of misconception that beliefs will always yield a positive outcome. Entrepreneurs’ decisions in buying and selling innovative products and services have a tendency of creating shortages, surpluses and misallocation of resources. There is an element of surprise to entrepreneurs who in one way or another discover these misconceptions, many of the entrepreneurs overlooks the possible outcome of the opportunities and therefore they are surprised by the outcome of their innovation (Kirzner 1997). Therefore, it is through invention and innovation that there is creation of new markets. It is through the entrepreneur spirit of resilience and perseverance to discover opportunities that is what matters for new product and firms to make profit.
Raymond (1999) concurs that there is need to recognize computer softwares as an economic value. To build a formidable value for softwares, the software vendors must understand its values before deploying them to be used by the users. Most business users are more inclined to know what value will the software bring to the business. These is quite evident compared to these analogy, most of the computer games users put much attention to what are the entertainment values offered by these games software these applies to other software. The users need and preferences must be adequately catered for when developing these softwares,. The management of knowledge and its coordination has been continued to illicit a lot of interest from researchers (Fayol, 1981). The most vital factor to be considered when building a software start up is the knowledge and skills of the team involved in making such softwares.
The emergence of Building Information modeling as shaped the way software engineers coordinate and communicate in a robust and efficient way. In the software business is imperative in data capturing and formalization of the construction knowledge (Wang and Leite 2012). Building information modeling has been used primarily for product information representation through its creation, processing to the actual representation; moreover it is also responsible for the relationship between the components of the model and its related information. However, during the coordination of the design its decision is not adequately addressed like capturing process that are easily interpreted by the computer. For instance, while the information of the product is adequately represented in three- dimensional model, process information is stuck on being represented in two- dimensional model.
Knowledge needs to be formalized for it to be understood. Since there is no standard set to check information, there is the likelihood of the knowledge being lost due to the lack of proper documentation. This calls for the need of a model-based knowledge that will not only capture process in an efficient manner but also it should be at the forefront in extracting and formalizing of the construction knowledge. Knowledge capture is an approach that aids in transferring and formalization of knowledge in the software industry . There are various techniques developed over the years to capture software knowledge that have been adopted after a thorough scrutiny of its efficiency and capabilities in developing software business. The technique reached was as a result of brainstorming, expert reviews as well as through observation. All of these techniques have been supported by information and communication technology.
Technologies such as knowledge documentation that are web based, knowledge-based system and annotation techniques have been customized to capture knowledge. During the software engineering process of producing a product, the product information is usually put down on design documents. A number of challenges have been identified that impedes management software knowledge especially in the. One such challenge is that construction knowledge is experts domain based and it is tacit (Khalfan et al. 2002). To add on that, the processes required in capturing knowledge in software industry is disorganized. Also, due to pressure exerted on people to achieve a set up goal there is no time left to concentrate on knowledge capture. Most software vendors relies mostly on the reviews of projects already done to derive a lesson and disseminate the information to other projects.
To remedy the above challenges, it is important that process information should be captured right there during the execution of the software project. After which they can be used again on future projects (Kamara et al. 2003). Moreover, knowledge capture based technology should also be advocated such as the use modeling techniques that are three dimensional in nature (Alwis and Hartmann, 2008).. The model has gone a long way in eliminating the traditional way of capturing construction knowledge such as the use of verbal communication and its documentation that are based on paper, these makes it hard for its reuse.
A number of software prototypes have been engineered in recent years that try to capture process information with tag functions that are augmented. This has led to success in its implementation in terms of model linkage to the tags, search clashes and information extraction and editing. These leads to the conclusion that through connection to the proposed model information can be easily captured and represented.
Human capital and capital venture
New technological firms are regarded as one important avenue of creating jobs and in turn stimulate economic growth of a country. Factors that drives their performance has been a subject of much investigation by the scholars and policy makers alike. Access to venture capital and the human capital of the founders of software starts ups are regarded as the key components in driving for the continued growth of software start ups. People who have human capital that comprises of educational attainment, vast work experience in line with the start of the new firm often have an upper hand in coming up with the correct enterprenearual judgement in grabbing a business opportunity that presents itself (Alvarez and Barney, 2002). Venture capital should be adequate enough to cover all the aspects of the software business, these is to ensure that the firm continued to stay float in the ever dynamic nature of software business. Most of the venture capital markets have devoted their time and resources in trying to understand emerging technologies and start ups, they mentor them before financing them disregarding the negative notion that might arise from the smallness or newness of such companies (Hannan and Freeman, 1989).
Venture capitalists brings with them an element of growth to most start ups, they provide the much needed contacts such a...