In this paper, we investigate economics of software development. We first identify several dimensions of software quality from user’s perspectives. We model the tradeoff between having more features and functionalities and the ease of learning in usability, and the tradeoffs among ease of use, ease of learning, and usage frequency. Based on the impacts of quality dimensions on user’s utility, we analyze the software monopoly’s economic incentives to provide high quality software products and build analytical model to analyze the software company’s optimal design decisions. (Keywords: Software, Usability, Economics)