f customers is affected less significantly by the margin the ISV imposes, but it is highly sensitive to the costs of integration and to the additional per-customer costs. This suggests that the ISV should devote significant efforts to minimize the integration costs and the additional per-customer costs, while relatively smaller benefit would be achieved if the margin were reduced. Finally, the estimated minimum number of customers can be used in order to estimate the maximum number of ISVs in the market as: where N is the total number of customers in the market, and max V is the maximum number of vendors. Note, that if N < min n, then max V < 1, i.e., the number of customers is insufficient even for a single ISV; in this case, the software market is unlikely to emerge, and the customers will likely develop all the software internally. O. Mazhelis and P. Tyrväinen min n min n 1. (10-1-2+x) / (10-1-2-4) 2. (10-2-2+x) / (10-2-2-4) 1. (10-1-2+30) / (10-1-2-x) 3. (10-3-2+x) / (10-3-2-4) 2. (10-2-2+30) (10-2-2-x) 4. (10-3.5-2+x) (10-3.5-2-4) 3. (10-3-2+30) / (10-3-2-x) 4. (10-4-2+30) / (10-4-2-x) Cintegr min n 1. (10-x- -30) / (10-x-3) 2 (10-x- 30) /(10-x-4) 3. (10-x+30) / (10-x-5) 4. (10-x+30) / (10-x-6) Fig. 2 Graphs depicting the dependency of the minimum number of ISV's customers on other variables: (a) margin; (b) customer's integration costs; (c) degree of ISV's customer-specific costs In segments with (1) high software development costs, (2) heterogeneous (also) legacy systems to integrate with, and (3) small pool of potential customers, the number of software vendors is unlikely to be significant. As a result, the expected evolution of the software market may stop, without proceeding to the vertically disintegrated layered set of software products with standardized interfaces between them. In this case software will be developed in-house or delivered as be-spoken (customized) services tailored for each customer by IT service houses. Example of Mediation Software Let us apply the above model in order to assess t