The paper examines the appropriability problem (i.e., the inability of
firms to profit fully from their innovations) with respect to investm
ents in intellectual property development in general and software in p
articular, evaluates marketing, legal, and technological dimensions of
the appropriability issue in the global software industry; and conclu
des that increasingly firms will supplement legal mechanisms with inve
stments in complementary marketing assets and development of marketing
strategies aimed at strategic alliances and diversification into rela
ted services in order to enhance the appropriability of the fruits of
their investments in software development.