Optimal Digital Product Maintenance with a Continuous Revenue Stream

TL;DR

This paper models digital product maintenance as a control problem to determine optimal effort over a product's lifecycle, revealing conditions for maintenance decline and illustrating strategies under various market scenarios.

Contribution

It introduces a control framework for analyzing optimal maintenance strategies and provides theoretical conditions for maintenance decline aligning with Lehman's 7th law.

Findings

Necessary and sufficient conditions for maintenance decline

Control paths vary with market conditions

Validation through numerical illustrations

Abstract

We use a control framework to analyze the digital vendor's profit maximization problem. The vendor captures market share by focusing costly effort on post-launch product maintenance, which influences user perception of the product and drives a revenue stream associated with product use. Our theoretical results show necessary and sufficient conditions for product maintenance to decline over a product's life-cycle, thus showing conditions when Lehman's 7th law of software evolution holds. We also numerically illustrate control paths under different market conditions.