Traditional software estimation models are directed towards large monolithic software development projects. Contemporary software development practices require a new approach to software cost estimation. The field of software engineering and software technology is developing very fast. In this paper, the authors introduce new concepts, methods, techniques and tools - or change existing ones and emphasize their value. A major turn in software engineering leading to Component ware has dramatically changed the shape of software development. Traditional software development approach is incapable to meet all requirements.