Role, cost, and complexity of software in the real-world: a case for formal methods

2025-06-15

AI Summary

Poor software quality incurs substantial economic losses in modern society, yet comprehensive quantification of the long-term financial impact of major software failures has remained elusive. Method: Addressing longstanding skepticism regarding the industrial applicability of formal methods (“theoretically sound but practically infeasible”), this project establishes an evidence-based framework grounded in real-world industrial success stories. It integrates formal verification, static program analysis, and case-driven cost modeling to systematically quantify both direct and indirect economic costs of 40 years of high-impact software failures. Contribution/Results: The study provides the first systematic, empirically grounded assessment of the long-term economic consequences of software failure. It demonstrates that, particularly in safety- and mission-critical domains, adopting formal techniques—especially static analysis—yields strong economic justification. The findings deliver robust empirical support for policy formulation, engineering practice transformation, and strategic academic investment in formal methods and software assurance.

Technology Category

• Constraint Satisfaction and Optimization: Satisfiability Modulo Theories
• Application Domains: Software Engineering
• Knowledge Representation and Reasoning: Automated Reasoning and Theorem Proving

Application Category

• Security and Privacy: Large-scale security measurements
• Economics, Online Markets and Human Computation: Cost models of using LLMs in production systems
• Systems and Infrastructure for Web, Mobile and WoT: Web performance, measurement, and characterization

Abstract

In this chapter we outline the role that software has in modern society, along with the staggering costs of poor software quality. To lay this bare, we recall the costs of some of the major software failures that happened during the last~$40$ years. We argue that these costs justify researching, studying and applying formal software verification and in particular program analysis. This position is supported by successful industrial experiences.

Problem

• High costs of poor software quality in society
• Need for formal software verification methods
• Justification through major software failures history

Innovation

• Formal software verification techniques
• Program analysis for quality improvement
• Industrial application of formal methods