Contractual Versatility in Software Business

  • Juhani Warsta
  • Veikko Seppänen
Conference paper
Part of the IFIP — The International Federation for Information Processing book series (IFIPAICT, volume 251)


This empirical study addresses the problem of how Commercial-off-the-Shelf (COTS), tailored, and Modified-off-the-Shelf (MOTS) software contracting has been approached, in practice. The focus of the study is on analyzing different contractual characterizations of the three models of software business. The empirical part of the study was completed by analyzing twelve software producing companies — eight were Finnish firms established in the Silicon Valley area in the USA and the rest were local Finnish firms with international operations. The research produced a number of practical insights for managing and developing the contracting process.


Business Model Product Family Intellectual Property Right Software Company Software Development Process 


  1. 1.
    H. Hertzfeld, A. Link, and N. Vonortas, “Intellectual property protection mechanisms in research partnerships”. Research Policy, 2006. 35: p. 825–838.CrossRefGoogle Scholar
  2. 2.
    R. Kemp, and C. Gibbons, “IPR indemnities in the open source and proprietary software worlds”. Computer Law & Security Report, 2005. 21: p. 420–422.CrossRefGoogle Scholar
  3. 3.
    M. Berrell, and J. Wrathall, “Between Chinese culture and the rule of law, What foreign managers in China should know about intellectual property rights”, Management Research News, 2007. 30(1): p. 57–76.CrossRefGoogle Scholar
  4. 4.
    J. Bessen, “Open Source Software: Free Provision of Complex Public Goods”, 2005, Boston University School of Law and Research on Innovation: Harpswell, ME.Google Scholar
  5. 5.
    S. Whang, “Contracting for Software Development”, Management Science, 1992. 38(3).Google Scholar
  6. 6.
    J. Marciniak, and D. Reifer, “Software Acquisition Management”, Industrial Software Engineering Practice, ed. F. Buckley. 1990, New York: John Wiley & Sons. 290.Google Scholar
  7. 7.
    F. Griffel, et al., “Electronic Contracting with COSMOS-How to Establish, Negotiate and Execute Electronic Contracts on the Internet”. IEEE, 1998.Google Scholar
  8. 8.
    A. Elfatatry, and P. Layzell, “Negotiating in Service-Oriented Environments”, Communications of the ACM, 2004. 47(8): p. 103–108.CrossRefGoogle Scholar
  9. 9.
    W. Adair, and J. Brett, “The Negotiation Dance: Time, Culture, and Behavioral Sequences in Negotiation”, Organization Science, 2005. 16(1): p. 33–51.CrossRefGoogle Scholar
  10. 10.
    R. Rajala, et al., Software Business Models, A Framework for Analyzing Software Industry. 2001, TEKES: Helsinki. p. 76.Google Scholar
  11. 11.
    R. Yin, “Case Study Research Design and Methods”, 2 ed. Applied Social Research Methods Series, Vol. 5. 1994, Thousand Oaks: SAGE Publications. 171.Google Scholar
  12. 12.
    O. Williamson, The Economic Institutions of Capitalism. 1985, New York: The Free Press. 450.Google Scholar
  13. 13.
    T. Roxenhall and P. Ghauri, ‘Use of the written contract in long-lasting business relationships’. Industrial Marketing Management, 2004. 33: p. 261–268CrossRefGoogle Scholar

Copyright information

© International Federation for Information Processing 2007

Authors and Affiliations

  • Juhani Warsta
    • 1
  • Veikko Seppänen
    • 1
  1. 1.Department of Information Processing ScienceUniversity of OuluFinland

Personalised recommendations