How Much? (OpenInsight 16-Bit Specific)
At 05 FEB 2003 04:59:31PM Marty Rosenbloom wrote:
Hi,
As part of my consulting business, I have used an OI program that I wrote on behalf of one of my clients. I have been charging them a monthly fee for this service. Today they asked me if I would sell them the program. I don't mind selling it to them, but I don't have the foggiest notion of what price to ask. Is there some formula to use? A set figure? Is there anything else that I would need? I am using OI v2.61.
TIA,
Babe in the woods.
Marty
At 05 FEB 2003 08:20PM Richard Hunt wrote:
As part of my consulting business, I have used an OI program that I wrote on behalf of one of my clients. I have been charging them a monthly fee for this service. Today they asked me if I would sell them the program. I don't mind selling it to them, but I don't have the foggiest notion of what price to ask. Is there some formula to use? A set figure? Is there anything else that I would need? I am using OI v2.61.
Marty,
I would base the amount upon the monthly fee multiplied by 36 or 60 months. Or estimate the number of months they will be using the program and devide by 2. Then take that amount and multiply it by the monthly fee.
Kinda like if they will be using the program for like 3 years (or 36 months) and your monthly fee is $100.00 then it would be (36 / 2) * 100=1,800.
And well… you also have to consider what amount is it worth to them. Also consider that they are probably interested in saving some money, so selling them the product might be a good thing.
Well… that is how I would consider the pricing.
At 06 FEB 2003 08:13AM Don Miller - C3 Inc. wrote:
I think it somewhat depends on whether you will need to perform routine maintenance on the software .. upgrades, enhancements, etc. I use several methods of pricing software:
1. What is the "utility" value of the software in terms of actual $$ that it saves the customer? If the software saves the customer 1 man-year of labor, then your price might be based on that figure, discounted by some factor. For example, if it saves $40,000 in direct labor costs, I might price it at $15,000 or somesuch negotiated item. This generally applies to one-off software when the cost cannot be spread among several customers.
2. If your service includes a good deal of "value-added" ongoing activity, then your price might be based on the "present value" of that revenue stream discounted for the cost of money over a reasonable time period. At that point, you would need to negotiate a cost, if any, for your ongoing service.
3. If there are any competing software products which your customer could acquire, then your price might be based on that figure.
Were you paid originally for the development? If not, then you might consider a way to recoup your original efforts via an installment payout.
Don M.
C3 Inc.
At 09 FEB 2003 11:31PM Robert Lee wrote:
Personally I'm not a fan of "selling" application software if I can help it. I believe if people are using it, and getting the benefit of it, they should pay for it. I would charge them a monthly fee for the use of the software (probably a bit less than you are currently charging to do it for them). I provide free upgrades as necessary, which means I only ever have one version of the software to maintain and it makes people feel as if they are getting a valuable return for their monthly payments.
Robert Lee