Real options as tool enhancing rationale of OSS components selection

Selecting suitable software entities to adopt in a software project can be a challenging task, as along with the desired characteristics, come risks associated with the inherent quality. Despite source transparency in the Open Source Software (OSS) realm, the vast number of available components hinder the component selection process. To overcome this, various software evaluation methods have been proposed, offering assistance in measuring various qualities and aspects of software components. However, these methods fail to take into consideration the profit generated due to selected quality characteristics, and thus, to provide an additional value-based view to decision makers. Real Options Theory has been proposed as a tool to enhance decision making, where alternatives are treated as ldquooptionsrdquo of an exercised value. This paper proposes Real Options as a tool assisting the componentspsila selection process in OSS projects. To achieve that, we first employ state of the art OSS evaluation methods in order to identify the quality risks associated with the adoption of each candidate component, and move on to exploit the flexibility hidden in these risks with real options analysis to calculate the system's generated value.