The current paper tackles the issues of formalizing the process of generating innovative results in software development projects. The paper is focused on incremental innovation. Incremental innovation was defined then innovation was analyzed in the context of implementing projects in several fields not related to the software development industry. Data and information on innovation was collected by reviewing case studies depicted in scientific literature. A schematic formalization of a generic product or service was built. Based on the formalization, a generic model for generating innovative results was assembled. The generic innovation model was built having activities as its core units. The generic model includes methods for generating innovation and indicates the component that has to be added, changed or removed. Each method was designed based on particular cases of innovation identified by reviewing scientific literature. The generic innovation model was formalized for different industries and then it was adapted and customized to fit the software development field. The software innovation model was validated in the context of software development projects. Data and information for software development projects was collected from the author’s own professional experience. A schematic formalization of a software application was built. The software innovation model was built having functionality as its core unit. The software model includes methods for generating innovation in software applications. Research results were epitomized, conclusions were formulated and potential new research topics were submitted for debate.