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Software Valuation: Tidbits

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Here are a couple tidbits about software valuation in the news recently. First, somebody with knowledge of arbitrage and derivatives took a look at software valuation. His results? somewhere around 85% of the price of software is in maintenance, upgrades, etc. Frankly, I find his analysis a little lacking, in that he did not mention integration costs at all, which as we all know rise exponentially with the number of systems deployed. Plus, it sounds like a shill for open source -- not that I think there isn't a great argument FOR open source, this just wasn't it.

Second, looks like the United States government is giving away software to docs to try to get medical records standardized. If there ever were a case study for software valuation, this would be it. Here you have free software which fulfills a useful role. Will the docs use it? Weirder still, will they continue to pay for software that does the same thing (my money is on the latter).
When the industry is still wondering, "Do we even own everything in our software portfolio?" , sofware valuation is definitely an extremely important issue to keep your eye on.

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This page contains a single entry by DanielBMarkham published on July 25, 2005 4:31 PM.

Women and Men Trust Differently was the previous entry in this blog.

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