The options approach to hardware design decision: Switching from object-oriented to aspect-oriented concepts

Traditional hardware design is not flexible. Specification changes often require redesigning from scratch. The Objected-Oriented (00) concept, which consists of encapsulation, inheritance and reusability mechanisms, is applied to solve the problem. However, the 00 concept still confronts code maintenance problem, as the same function may be redundant in several objects. The Aspect-Oriented Programming (AOP) concept is introduced to hardware design to handle the challenges from the 00 concept. To decide whether to switch the hardware design technology from 00 to AOP concepts, one has to consider many uncertainties related technology change. The Net Present Value (NPV) is the traditional valuation approach to investment decision, but it does not handle uncertainties directly. The real options approach, which supports the valuation of project investment under uncertainty, is proposed to value the expected payoff of the technology shift from 00 to AOP concepts. This paper illustrates how to apply the real options approach to hardware design decision. Insights from applying the real options framework are presented as guidelines in considering the hardware design technology switch.