Dwight Olson

CLP, V3Data, Principle, San Diego, CA, USA

Wikipedia defines computer software as “anything but hardware, meaning that the “hard” are the parts that are tangible while the “soft” parts are the intangible objects inside the computer. Software encompasses an extremely wide array of products and technologies… Software is [also] involved in video games and the logic systems of modern consumer devices such as automobiles, televisions, and toasters.” With such diversity how can one ever begin to understand software value? Thus, Total Software Values (TSV) came into existence.

Any proprietary technology that confers to its owner competitive advantage relative to its competitor is generally recognized as a valuable technology intangible and this is especially true for software. There are numerous reasons to conduct a valuation of a software based technology and in using Total Software Value (TSV) there are three primary but different value contexts that are highly appropriate to consider for all software. These three different analyses are used to value the different contexts of software owned by an entity. The three contexts provide insight into: software inventory (OV), transaction (MV), and trade secret Internal Cost Saving (ICS) values. In TSV, these three different value contexts are independent of each other. Consideration by the software owner of these distinct contexts helps with insight into governance, investment, sale, exclusive licensing, licensing royalty management and apportionment. Consideration of these contexts helps the stockholder or investor with transparency into the software assets owned by the company.

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