"Licensing" of Already Delivered Software? 57
Matterama asks: "My partner and I are treading on thin ice. We delivered six microprocessor controllers with source code libraries to a customer, under a written agreement to negotiate the license for that code from us once they got it working with their system. That time is upon us, and we realize that we do not know how to go about this (yep, we're pathetic). They want to buy 1000 units, and we are not setup to be a Microsoft (nor do we want to be). If I'm going to get a good, simple answer that puts money in our pockets for our work, it will be here. Can Slashdot recommend solutions or sites with solutions?"
Try this? (Score:4, Informative)
I.e.
May modify code and build modified binaries, and redistribute binaries.
May not distribute their source code in any form.
You. Are. Screwed. (Score:2, Informative)
After you get out of bankruptcy, try to remember this incident, mmkay?
Negotiate payment BEFORE A SINGLE LINE OF CODE IS WRITTEN. Your contract starts with a MINIMUM amount, which MAY INCREASE depending on the work involved in the project. Don't EVER give the client a chance to screw you, BECAUSE THEY WILL.
How to hire a lawyer (Score:4, Informative)
2. The Yellow Pages
3. The County Bar Association
Some people worry they can't afford a lawyer. You have a deal for 1000 units, so this is not your problem.
Some people have an irrational fear of actually picking up the phone and making an appointment with a lawyer. If this is your problem, stand on your head and take ten deep breaths. Consult with a doctor before beginning any exercise program.
Business Models 101 (Score:3, Informative)
What you do not want to do is to ask your customer to set the price for you. In any negotiation, you have to make sure you control the conversation, make the initial offer, and steer it along the lines you need. This means something like the following:
a) compute the development costs for the system. Be realistic and honest. Do not discount your and your companies time/efforts/equipment.
b) compute the production and support costs. Rampup is not cheap, requires procedures be developed. Support is not cheap. Requires people/procedures.
c) compute the space costs, and other indirect costs of doing business. These are not cheap. If these folks are your only customers, then all your indirect costs are due to work on their behalf. If they are one of several, try to apportion the fraction of the indirects that are due to their project to this.
d) sum up the costs. Call this variable $cost.
e) now what profit do you need to make? Look at it this way. If the customer stopped ordering after the 1000 units, how much money would you need to stay in business for a month or two if they are the only customer? Figure out what a reasonable profit is for this. Call this $profit.
f) now sum together $cost + $profit and divide by 1000. That is your price per unit to your customer.
Once you have this price, do not, and I repeat, do not tell this to your customer. Give them a number 10 - 20% higher.
They are going to negotiate with you over the price. Their goal is to minimize their costs. Your goal is to attain the number you need ($price + $profit). These two are incompatible without agreement, so you start a little high, and let them talk you down to their number. You get a concession for this number. They help you find another customer, or they promise to order another thousand or so. That is, it is in their interest to provide you what you want, in order for them to get what they want.
Note: if the customer simply says "OK" and starts writing a check, you have made a critical sales mistake. It is called "leaving money on the table". The customer would likely have been happy with a higher number, which means that you missed out on that profit.
Remember, you do not want to gouge your customer. If what you deliver is critical for their efforts, they will be willing to negotiate with you. Just be aware that the stances that some folks take when negotiating can be infuriating, no matter how cordial the relationship is prior to that.
Your goal is to build a long term supplier relationship with these folks. Repeating revenue is much much better than a large revenue infusion. The latter will seem bigger, but it is harder to maintain business with this. This is why everything is going to subscription based services.
As for the software, well, this is going to be unpopular here, but tough.
Open source does not a business model make.
It is a bad strategy if there is value in what you have done here. You may want to grant the customer freedom to modify the code, or to hire others to modify the code (why, thats revenue off your company, or if you are a small operation, food off your table). You can give them the right to alter the source code.
Do not give them the right to redistribute the source without your permission. This is a bad thing if you have competitors who would benefit from seeing the code.
GPL advocates are likely to be up in arms over this. Runs counter to their thinking. Then again, when you have a family sitting across from you at the table, and you are worrying where your next che
Re:You're in a really strong position (Score:3, Informative)
This is when you need the intimidating law firm.