Software manufacturing

Software manufacturing is the process of producing software in ways similar to the manufacturing of tangible goods. In this way of conducting business, each copy of the software is priced and sold as though it was a tangible product. The sales process usually is conducted by per copy or per desktop software licensing.

When this method is used, the software is developed by software engineering firms specializing in such practices and distributed through retail stores and sold on a per unit basis at a margin price to the buyer greater than zero, even though discounting sales support, tech support, advertising, packaging, licensing agreements, refund and return handling, liability insurance, sales processing, support of new operating systems, and other costs, software has a zero marginal cost per copy to the producer. Software manufacturing like all other tangible goods can have errors, and Total quality management (TQM) can be implied in the process.

Both proprietary software and free software can be produced in this model and sold and distributed as commercial software.