Analysis of the Role of e-Business in the Emerging Software Component Markets Nina Helander Ph.D. Student, Project Researcher University of Oulu nina.helander@koti.tpo.fi Veikko Seppänen D.Tech, D.Econ, Professor University of Oulu veikko.seppanen@oulu.fi INTRODUCTION Reuse of standard software components is a contemporary trend not only in the software industry, but also in many other industries that make use of software in their systems and products. For example, modern automation, telecommunication and electronics products are based heavily on software. A software component can be defined as a piece of reusable and independent computer program that is accessible through specified interfaces [e.g. Szyperski 1997]. Due to their reusable and independent nature, software components are expected to make software development more effective by offering cost and time savings and quality improvements. The idea of large-scale reuse of standard software components was introduced as early as in the late sixties in a workshop organized by NATO, but rather little has happened during the past thirty years when it comes to systematic reuse of commercial software components. However, intra-organizational software reuse has emerged quite rapidly in the nineties, based on proprietary software architectures and platforms. Moreover, many software products can be seen as "large" components and platforms on which different applications are being built. The best known examples of the latter include not only Windows and other operating systems, but also databases, communication protocols and user interface software packages. Commercial software component business in the sense of recognizable markets consisting of customers and sellers is still at its early stage of development, although the impact of software components on industrial software development is already evident. Some of the likely problems are the lack of understanding of how software components produce value for their buyers, and how component sellers and purchasers could interact, in practice. These questions are addressed in this paper, taking a view that buyer value creation is a key driving force for the use of 117