CS 501: Software EngineeringPowerPoint PresentationAdministrationSlide 4Some Business ModelsFree-Lance Software DevelopmentSlide 7Slide 8Fixed and Variable Cost: Packaged SoftwareFixed and Variable Costs: Profit or LossProfit or Loss?Unorthodox Business Models: SharewareUnorthodox Business Models: Open SourceNotes on Open SourceOpen Source LicenseDiscussion of Pfleeger, Chapter 3Question 1: Effort EstimationQuestion 2: Risk ManagementQuestion 3: Project ManagementQuestion 4: The Person-Month1CS 501 Spring 2002CS 501: Software EngineeringLecture 7Business Aspects of Software Engineering2CS 501 Spring 2002Submit your student projects by February 18, 2002. See www.cs.cornell.edu/boom.3CS 501 Spring 2002AdministrationFeasibility reportPlease submit an email message to [email protected] with the report as an attachment. Possible formats are .doc, .pdf, .html, .ps, or .txt.Project teamsIf you are not a member of a team with 5 to 7 people, please meet at the end of the class.emailCopy email messages to [email protected] only if you want a response from the course team.4CS 501 Spring 2002AdministrationQuiz 1Quiz 1 will be returned at the beginning and end of class today. If you do not pick up your work now, it can be collected from Rosemary Adessa in Upson 5147. The quiz and the solution to Question 2 are posted on the web site, under Assignments. Question 1 will be discussed in the lectures.5CS 501 Spring 2002Some Business ModelsBespoke software for customersoftware is written by independent contractorproduct may be owned by supplier or customerPackage licensed to customerbinary only (Microsoft model)source code for customer's modificationsSoftware developed in-houseSoftware bundled with hardware product (PalmPilot, digital camera)6CS 501 Spring 2002Free-Lance Software DevelopmentYou and a few friends create a company to develop software. You are offered a contract to write bespoke software.How much should you charge per hour?You plan to work 40 hours a week for 50 weeks of the year and want to earn $50,000.Hourly rate = $50,000 / (40 x 50) = $25But ...7CS 501 Spring 2002Free-Lance Software DevelopmentSalary $50,000Taxes and benefits $15,000Rent, equipment, etc. $10,000Fees, services, etc. $15,000Travel and misc. $10,000 TOTAL EXPENSE $100,000Hours worked 2,000less administration 400less marketing 350 BILLABLE HOURS 1,250Hourly rate = $100,000 /1,250 = $808CS 501 Spring 2002Free-Lance Software DevelopmentYou MUST have a contract with the customer. It may be a simple letter or a complex agreement.What should it contain?Are you being paid by the hour? Or by completion of the task?What acceptance tests will be done? Who decides when the job is done?Who owns the software? What licenses does the other party have?Who provides hardware, software that is required, supplies, etc.?WHEN WILL YOU GET YOUR MONEY!9CS 501 Spring 2002Fixed and Variable Cost: Packaged SoftwareExample:• The initial development cost of a software product is $1 million.• The cost of packaging and distribution of each copy is $5.• Technical support costs average $15 per copy.• The package sells for $200 per copy.Fixed cost = $10 millionVariable cost = $2010CS 501 Spring 2002Fixed and Variable Costs: Profit or Loss$1.5M$1.0M$0.5MUnit sales2,500 5,000 7,500RevenueCosts11CS 501 Spring 2002Profit or Loss?If you sell 7,500 copies do you make a profit of $350K?•Did you borrow money to cover the start-up period? How much interest did you pay?•What about taxes?Cash flow•When will you be paid (always late)?•When do you have to pay your bills?Risk•What extra costs do you have if the product is a year late?•What if you only sell 5,000 copies?•If you increase the price, does your revenue go up or down?12CS 501 Spring 2002Unorthodox Business Models: SharewareShareware•Producer writes a software package.•Distribution is open, but requests a fee, e.g., $50.•Users who pay the fee may get a small benefit, e.g., no message when they start up the software.•Some people have received substantial revenue this way.13CS 501 Spring 2002Unorthodox Business Models: Open SourceExamples: Linux, Apache, Perl•Market leaders•High qualityGeneral model•Shared development•A central developer provides overall coordination•Distribution of source code is completely openPersonal examples:•TCP/IP for Vax/VMS•Python14CS 501 Spring 2002Notes on Open SourceSoftware may be open source, but packaging and services can be profitable businesses (e.g., Red Hat, IBM Linux).For more information about open source software, see:http://www.opensource.org/Many open source software projects are managed on the SourgeForge system:http://sourceforge.net/Open source software development and distribution is particularly suitable for organizations such as universities who develop software for the public good.15CS 501 Spring 2002Open Source LicenseSample open source license (GNU General Public License):http://www.opensource.org/licenses/gpl-license.html• Free redistribution• Source code available• Derived works permitted• Integrity of the author's source code• No discrimination against persons or groups• Protection against unscrupulous patents• No discrimination against fields of endeavor• License must not be specific to a product16CS 501 Spring 2002Discussion of Pfleeger, Chapter 3Format:State a question.Ask a member of the class to answer. (Sorry if I pronounce your name wrongly.)Provide opportunity for others to comment.When answering:Stand up.Give your name or NetID. Make sure the TA hears it.Speak clearly so that all the class can hear.17CS 501 Spring 2002Question 1: Effort Estimation(a) Give five reasons why estimates of effort are often wrong.(b) In algorithmic methods of estimation, what is the most important factor used to predict effort?(c) Name two other important factors.18CS 501 Spring 2002Question 2: Risk Management(a) Personnel shortfalls are a major risk factor. What can be done to address them? (b) What is gold plating? What can be done to lower the risk associated with it?(c) Why are computer science capabilities considered a risk factor?(d) The book defines risk exposure as: risk impact x risk probabilityDo you find this concept useful?19CS 501 Spring 2002Question 3: Project Management(a) The book is very enthusiastic about the Enrollment Management model used by the Digital Equipment Alpha AXP project. What are the characteristics of
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