An implementation for estimating the costs attributable to software failures brought on by defects, i.e. estimating that portion of the cost of owning software products that is attributable to potential damage to the software owner resulting from potential defects in the software provided by particular software suppliers. Calculating the cost of ownership of a software product obtained from a proposed supplier, including a cost of software failure factor that is estimated as follows: predetermining the quality level of an ideal supplier of the software product and then determining the deviation in quality level of the proposed software supplier from the ideal supplier level. Then, estimating the difference in product defect rate at the quality level of the proposed supplier from the defect rate of the ideal supplier, after which the cost to compensate for the damage resulting from each defect based upon the intended use of the software product is estimated. Finally, a cost of software failure factor for each unit of the software product obtained from the proposed supplier is calculated by multiplying said difference in defect rate by the cost to compensate for damage resulting from each defect.