Historically, software application systems have been produced either individually tailored for the specific customer, or they have been adapted from standardized packages. This paper proposes that component based software development could provide a synthesis of both approaches, combining the best aspects of each of the other two paradigms. Taking a closer look at the underlying principles of software reuse and modularity, however, reveals a number of conflicting forces that influence the acceptance and diffusion of this new paradigm within and throughout the software industry. A dialectical change perspective is used to explain this change process. It is argued that traditional software producers have a dominant position in their industry, and will be able to retain this position for some time. However, the concept of mindful innovation is introduced to give an outlook how smaller software producers might exploit the opportunities that this paradigm shift provides.