Providing opportunities for students to work on real-world software development projects for real customers is critical to prepare students for the IT industry. Such projects help students to understand what they will face in the industry and experience real customer interaction and challenges in collaborative work. To provide this opportunity in an academic environment and enhance the learning and multicultural teamwork experience, the University of Oulu, Finland offers the software factory (SWF) project. This paper presents the design of the SWF course and the learning environment and assessment techniques, and it discusses the importance of reflective learning diaries and serious games. Additionally, this paper examines factors in the SWF learning environment that affect student learning in the SWF course. Survey data were collected from the last six years of SWF projects. The results show that students consider the SWF to be a good collaborative learning environment that helps them achieve academic triumphs and enhances various professional skills. The learning diaries are effective for increasing students' learning experiences as well as providing an opportunity for teaching staff to monitor students' progress and offer better facilitation. These results are helpful for academic institutions and industry when developing such a learning environment. [For the complete proceedings, see ED608557.]