The Business of Software - Fall 2003

Never in history has a single individual been able to accomplish so much with so little. This makes software not just the most interesting industry of our time, it's the most interesting industry of all time. This course is aimed at teaching individuals how to exploit (in everything from start-up to large corporate environments) the perennial opportunities in software:

• Identifying key software industry trends
• Identifying attractive software market opportunities
• Matching the exit option (IPO, acquisition target, cash cow) to the opportunity
• Identifying, creating, and managing a successful software development team

As well as teaching how to address the perennial challenges of the software industry:

• Turning value into revenue - getting customers to pay for something that's intangible
• Changing buying behaviors in a pre-defined market segment
• Making the distinction between a technology, a product, and a market-maker
• Finding the right distribution channel for your software product
• Learning how to minimize and manage software support costs

Kurt Keutzer is a Professor in Electrical Engineering and Computer Sciences (EECS) at University of California, Berkeley (1998 - present). He manages a research program of 9 doctoral students, 3 post-doctoral fellows and 2 visiting industrial visitors and teaches the undergraduate software engineering class.

Since joining UC Berkeley he's been an advisor, investor, and (sometimes board member) to four software companies that have already found successful exits: Simplex (IPO, now Cadence), Right Track CAD (Altera), Everest Design Automation (Synopsys), and Cadabra (Synopsys, via Numerical Technologies). In addition, he's been active in formation/investing/advising to a number of other start-up companies: Tensilica (upside hot 100), 0-in Design Automation, Catalytic Inc, Stretch Inc. He also regularly serves as a due-diligence advisor to several VC firms.

Before coming to Berkeley, Kurt was at Synopsys, Inc (19th largest software company in the world) from 1991 until 1998. At Synopsys, he was Senior Vice-President and CTO, where he oversaw the technology of 25 software products, developed corporate technology strategy and was an integral part of the business development team responsible for over a dozen acquisitions, and was a line manager for the development of two successful software products.

Before Synopsys, Kurt was a member of technical staff at AT&T Bell Laboratories in the prestigious Area 11 (transistor, UNIX) research laboratory.

Case study assignments
A typical week will consist of a lecture on Monday with a related case study assignment discussed on Wednesday. Each case study will have an assignment associated with it. These assignments will be turned in via email to the TA and Prof. Keutzer (keutzer@eecs.berkeley.edu) and are due by 8am the morning the case will be discussed. Please limit your responses to 1 page or less.

Project
The software industry is built on its individual products. The key to building successful software products is to find a match between end-user needs and the appropriate technologies to meet those needs. To be successful in software in any environment, one must have the ability to quickly identify the requisite technologies to meet a market need. The course project will be to identify a promising software product opportunity and outline an approach for realizing that opportunity. This will entail either maximizing the market opportunity of a novel technology or identifying a promising market and then finding the requisite technologies to meet that market.

Projects will be structured like a consulting engagement where the group is presented with a real-world problem in the software industry. The project should include a detailed analysis of the issue along with some recommendations of how to proceed. The project deliverables are:

• a class presentation (~30 minutes)
• final report (<3000 words, not including appendices)

Participation
A large part of the course will be driven by discussion, so speak up! Expect cold calling.

• Case study questions
  
  • 11 assignments x 5 points each: 55 points
• Class project (presentation & final report): 25 points
• Participation: 20 points

Cases
There will be 10 cases presented in class. A reader with all the cases will be available at Copy Central.

Required Text
There will also be reading assignments from:

• Detlev J. Hoch, Cyriac R. Roeding, Gert Purkert, Sandro K. Kindner, Ralph Muller, Sandro K. Lindner, Secrets of Software Success: Management Insights from 100 Software Firms Around the World, Harvard Business School Press; (January 2000).

Recommended Text

• David G. Messerschmitt, Clemens Szyperski, Software Ecosystem : Understanding an Indispensable Technology and Industry, MIT Press; (October 2003).