Correlation, Business Model and Profitability of Japanese Software Companies

摘要

This study is aimed at investigating the correlation between business model and profitability.rnThere are about 7,100 software companies and 12billion dollars industry wide revenue in Japan. 80% of industry revenue is system integration and relating services. Revenue of packaged software is around 10% of total revenue. From 20 years of our experience, worked for system integrator and packaged software company, it's found out that profitability of those two types is so different and from business model study in the business school, also found out that business model is so different.rnThis study starts from the hypothesis that business model defines profitability of the company, thus design of profitability is design of business model.rnThere arc three types of companies in the software industry. System integrator. Package software developing company and Internet related company. This study covers system integrator and package software developing company.rnAl first, compare typical feature of two types of business model. Then compare financial records in order to study if there are any relation between business model and profitability.