Michiel van Genuchten talk on software impact, based on a series of columns in IEEE Software discussing the impact on software and analysis of size and volume of software.

1. Impact of software
Michiel van Genuchten
Open Digital Dentistry, Switserland
“Impact” series of columns published in IEEE Software since Jan 2010;
see www.computer.org/software
Column editors Michiel van Genuchten and Les Hatton
05/10/2011 © Michiel van Genuchten & Les Hatton

2. 05/10/2011 © Michiel van Genuchten & Les Hatton

3. What we know:
Software is changing industries
• Computer industry in the 1990’s
• Mobile phone industry today
• Medical and car industry next
• Many more to follow
• ‘Every company is a software company’ (Watts Humphrey)
05/10/2011 © Michiel van Genuchten & Les Hatton

4. What we do not know
• At what pace are changes happening?
• Is impact the same in different applications / industries?
• Quantitative understanding of causes and effects?
• Timing; when will it happen?
• How to make money after the sw change?
05/10/2011 © Michiel van Genuchten & Les Hatton

5. Impact series of columns
• Let’s ask senior managers in various industries
• Demand size and volume information
• 10 columns appeared in 2010 / 2011
• Products from following industries:
– Car industry (Bosch and Tomtom)
– Medical industry (Philips MR)
– Aerospace (Honeywell)
– Train control (Hitachi)
– Mobile (Realnetworks)
– Copiers (FujiXerox)
– Workflow (Uni of Brisbane – open source)
05/10/2011 © Michiel van Genuchten & Les Hatton

6. MR growth over time
05/10/2011 © Michiel van Genuchten & Les Hatton

7. Honeywell Flight Management System
• “The current-generation FMS supports all applications and
any airframe, and every major aircraft manufacturer includes
a Honeywell FMS in their cockpits. FMS installations include
the world’s two largest commercial manufacturers, Airbus and
Boeing, as well as major business jet manufacturers
Bombardier, Cessna, Dassault, and Embraer”
• Airbus and Boeing do not write their own FMS
– Airbus 380 costs 300M and Boeing 787 about 150M
– Honeywell has higher volume than Boeing and Airbus
• Why do companies still develop low volume sw themselves?
05/10/2011 © Michiel van Genuchten & Les Hatton

8. Real Networks
• Large sw product (up to 100MLOC)
• In huge volume (100 M copies year)
• Combination of open and closed source
• Revenue model on server and client side
05/10/2011 © Michiel van Genuchten & Les Hatton

9. There is only one Tokyo
05/10/2011 © Michiel van Genuchten & Les Hatton

10. Volume and size over time; Tomtom
05/10/2011 © Michiel van Genuchten & Les Hatton

11. Some definitions
• Size: KLOC’s or MLOC’s
– We know issues with LOC’s
– Pretty good descriptive measure
• Volume: follow the money follow the license
– Embedded: no of boxes
– Licensed sw: ask legal or sales
– Open source: no of clickthroughs
– Website (eg. Search); no of unique IP addresses
05/10/2011 © Michiel van Genuchten & Les Hatton

12. Impact
Size of sw
in LOC
100M Real
Tokyo
railway player
MR copier
10M TomTom
scanner
1M FMS
airplane ECU
100K CAR
Workflow
10K
1 100 10k 1M 100M Volume or
unique users
in #/year
05/10/2011 © Michiel van Genuchten & Les Hatton

13. Definition of sw mileage
• The number of new customers per year per LOC.
• “Software mileage is a measure of how many new
customers you gain per LOC written. If you gain lots of
new customers per LOC, your code is getting excellent
mileage and your software investment is reaping rich
rewards.”
• “If you have to write a lot of software per new
customer, you need to have a high royalty per
customer, or profitability is unlikely.”
05/10/2011 © Michiel van Genuchten & Les Hatton

14. Software mileage:
New customers per line of code per year
Product Software mileage
Electric control unit in Car 67
Multimedia player in mobile phone 10
Navigation system in car 2
Workflow 0.1
Flight management system in airplanes .001
MR system .0001
Train traffic control system < 0.000001
05/10/2011 © Michiel van Genuchten & Les Hatton

15. How to use sw mileage?
• Compare within an industry
• Look to your right for trouble
• Can be addressed with executive management
– Tech people know size
– Sales or legal people know volume
– Executives are used to ratio’s like this
• It worked in my industry
05/10/2011 © Michiel van Genuchten & Les Hatton

16. Research questions / hypotheses
• Comparable products have comparable size
• Software mileage is higher upstream in value chain
• Software mileage is PI for sw intensive business
05/10/2011 © Michiel van Genuchten & Les Hatton

17. Conclusions
• Volume is key in understanding sw industry
• Software mileage is understood by managers
• There is a lot we do not know yet about sw economics
• But we are learning
• More columns are welcome
05/10/2011 © Michiel van Genuchten & Les Hatton

18. 05/10/2011 © Michiel van Genuchten & Les Hatton