NIST GCR 02-834 Benefits and Costs of ATP Investments in Component-Based Software Prepared for Economic Assessment Office Advanced Technology Program National Institute of Standards and Technology Gaithersburg, MD 20899-4710 By William J. White, Ph.D. Michael P. Gallaher, Ph.D. Research Triangle Institute Research Triangle Park, NC 27709 Grant 50 SBNB6C9323 November 2002 View PDF version of NIST GCR 02-834.

    Abstract
    Acknowledgments
    Executive Summary

1.  Introduction

• 1.1 Government’s Role in Supporting Research and Development 
• 1.2 Evaluating the Effectiveness of ATP Projects
• 1.3 RTI’s Approach to the Current Study on Component-Based Software
• 1.4 Outline of the Component-Based Software Development Study

2. Overview of the CBSD Initiative

• 2.1 Historical Approach to Software Development
• 2.1.1 A Brief History of the Software Industry
• 2.1.2 The Software Development Process
• 2.2 Definition of Component
• 2.3 Component Characteristics
• 2.3.1 Identification
• 2.3.2 Qualification and Suitability Testing
• 2.3.3 Component Adaptation
• 2.3.4 Integration
• 2.3.5 System Evolution/Upgrade
• 2.4 ATP Involvement
• 2.4.1 Rationale for ATP Involvement
• 2.4.2 Role of ATP
• 2.5 CBSD Supply Chain

3. Analysis of Completed Projects 

• 3.1 Introduction
• 3.2 Conceptual Development Model
• 3.2.1 The Development Process
• 3.2.2 Sources of Funding
• 3.2.3 Factors Affecting the Economics of the R&D Decision
• 3.3 Impact of ATP Funding
• 3.3.1 Retention of Ownership
• 3.3.2 Project Acceleration
• 3.3.3 Return Time on Investment
• 3.3.4  Credibility
• 3.3.5 Probability of Success
• 3.3.6 Project Scope
• 3.4 Causes of Failure

4. Impact Measurement Methodology

• 4.1 An Economic Model of Software Markets
• 4.2 Operationalizing the Model to Quantify Economic Impacts
• 4.2.1    Measuring Benefits Captured by Customers
• 4.2.2    Empirical Measurement of Derived Demand
• 4.2.3    Measuring Producer Surplus and Profit
• 4.2.4    Capturing ATP Expenditures
• 4.2.5    Summary of Calculation Methodologies

5. Quantitative Analysis of Eight Case Studies

• 5.1 Program Description
• 5.2 Portfolio Performance
• 5.2.1 Overall Focused Program Performance
• 5.2.2 Individual Project Performance
• 5.2.3 Distribution of Benefits
• 5.3 Additional Contributions of ATP
• 5.4 Conclusion

References 

Appendixes

• Appendix A: Methodology for Selecting Detailed Case Studies
• Appendix B: Case Studies
• B.1   Aesthetic Solutions Inc.
• B.2   Commerce One Joint Venture
• B.3   Extempo systems, Inc.
• B.4   Intermetrics, Inc.
• B.5   Real-Time Innovations, Inc.
• B.6   Scicomp, Inc.
• B.7   Tom Sawyer Software
• B.8   Xerox, Palo Alto Research Center

Figures

• Figure 1-1 Elements Determining Social Return on Public Investment and Social Return on Investment
• Figure 2-1 Waterfall Model 
• Figure 2-2 CBSD Supply Chain 
• Figure 3-1 New Technology Development Process
• Figure 4-1 Market Equilibrium for Natural Monopoly Software Product 
• Figure 4-2 Effect of R&D Subsidy on Software Product Equilibrium 
• Figure 4-3 Effect of Demand Increase on Software Product Equilibrium
• Figure 4-4 Consumer and Producer Surplus Calculation for Component Software Product

Tables

• Table 2-1 Allocation of Effort
• Table 2-2 Comparison of Conventional Approach to CBSD 
• Table 2-3 ATP CBSD Funded Projects 
• Table 2-3 ATP CBSD Funded Projects (continued)
• Table 2-4 December 2000 Status of CBSD Projects by Funding Round
• Table 2-5 Selected CBSD Supply Chain Participants 
• Table 2-6 Industry Establishments, Receipts, and Employment 
• Table 2‑7 System Architecture, Component Tools, and Components In Use
• Table 3-1 Funded and Commercialized ATP Projects by Year and Company Size/Project Type
• Table 3-2 Impact of ATP on U.S. Ownership
• Table 3-3 ATP Acceleration of Time to Market  
• Table 3-4 Impact of ATP Award on Firm Credibility   
• Table 5-1 ATP Funding of CBSD Program, by Year
• Table 5-2 Total Expenditures and Benefits (thousands of 2000 dollars)  
• Table 5-3 Measures of Performance of ATP-Funded CBSD Program  
• Table 5-4 Individual Project Performance 
• Table 5-5 Distribution of Benefits (in millions of 2000 dollars) 

Date created: December 3, 2002
Last updated: January 15, 2003