15.358 | Fall 2005 | Graduate

The Software Business


Course Meeting Times

Lectures: 1 session / week, 3 hours / session

Course Description

This subject is a seminar-style course aimed at anyone who is interested in founding a software company or working for a software company or company that uses software technology extensively as a senior manager, developer, or product/program manager. It is also appropriate for people interested in the industry or in working as an industry analyst. Many of the issues we discuss are highly relevant for companies whose businesses are heavily dependent on software, such as e-business or financial services, or embedded software for industrial applications.

We start by considering key topics in high-tech company strategy and market positioning. We will also review the history of how software became a business at IBM and other companies, ranging from early developments in services to the emergence of a products business and attempts to exploit open-source software. Then we examine in some detail the approach to strategy, organization, and product development at Microsoft®, arguably the world’s largest and most successful dedicated software company. We also analyze some new software technologies and companies and consider the business opportunities much as would a venture capitalist. Finally, in the last part of the course, students form teams and analyze a small set of “interesting” and “emerging” software technology areas and companies that they select with the approval of the instructor.

In general, we emphasize the excitement, as well as the difficulties, of managing in a fast-paced high-tech environment where it is difficult to plan more than 6 to 12 months ahead and where strategic, organizational, and technological flexibility are of paramount importance. We consider also how the key assets of such high-tech organizations are its products and its people. The instructor has written a text for the course, titled The Business of Software, based on his research and topics covered in this class in prior years, as well as a profile of Microsoft®, Microsoft® Secrets , that we draw on for the course. There are also a number of other required and recommended readings to supplement the text, as well as videos and some guest speakers.

This year we also have a guest senior lecturer, Imran Sayeed, who will participate in the course and help organize several sessions, particularly on software entrepreneurship and global development. Mr. Sayeed is the co-founder and chairman of NetNumina Solutions, a custom software design and development company acquired by Keane, Inc. in March 2005.

A key feature of the course is that we will share what we know and learn during the semester. We ask student teams to volunteer for some of the sessions to provide additional perspectives on the topics. They will meet with the instructors before class and then prepare discussion issues and brief presentations for the class. Each presenting group is also required to prepare a handout for class, including a one-page wrap-up sheet for the day on “lessons learned” or “takeaways” from the day’s materials.


Grading will consist of approximately 25% class participation, 30% from three short essays on the readings and lectures (“reaction papers”), 15% from student team presentations to supplement the lectures, and 30% from the team project papers.

Activities Percentages
Class Participation 25%
Three Short Essays 30%
Student Team Presentations 15%
Team Project Papers 30%

Required Reading

Cusumano, Michael A. The Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know in Good Times and Bad. New York, NY: Free Press, 2004. ISBN: 074321580X.

Cusumano, Michael A., and Richard W. Selby. Microsoft® Secrets. New York, NY: Free Press, 1998. ISBN: 0684855313.

Moore, Geoffrey. Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. Revised ed. New York, NY: HarperBusiness, 1999. ISBN: 0887307175.

Selected articles and excerpts.

Course Info

As Taught In
Fall 2005