Hi All,

First of all thanks to those folks who responded with some helpful points.
To clarify some of the questions asked:

I understand with glaring clarity that I'm am replaceable and know making demands never works. Over the years, the company's revenue has increased. But also over the years, I've spent more time adding features. It was probably my fault for not clearly detailing how much time I'd spend adding features & functionality versus just maintaining the existing application. Last year I did a bit of calculation on how much time I spend on maintaining and improving the application versus my percentage of revenue compensation and I came to a rate of about $15/hour.

While in the very beginning of this project, I did it more for the learning of building a large application and the money was a nice side job. But now, it seems the hours got longer (due to significantly increased code base) and the pay didn't keep pace. At ~$15/hr it's just not worth the time to keep staying on the project. However, to get the compensation to a more "market-rate" level seems very difficult. The revenues for this business market (its academia & government) has been going steady down (the owner must keep lowering bids each year to get a contract). Looking at the numbers coming in, if he had to pay me a market-rate for programming, his IT budget would double or more and the business would go under. Which leads me to think that perhaps this isn't a viable business anymore if one can't make enough income to cover the costs of infrastructure.

Maybe it's time to let this one go...

Thanks for letting me rant!

Peter

On 7/9/2012 8:01 PM, Mark Phillips wrote:

I don't quite understand what is going on.

Has their gross revenue remained flat for all these years, do you are not making add much as before? Or, are you now thinking that the percentage is too low?

Are you spending more time maintaining their servers and performing updates than when you started? Are you creating new functionality for them?

Mark

On Jul 9, 2012 7:16 PM, "AZ Pete" <plug@cactusfamily.com> wrote:

Hi All,

I'm in a bit of a quandary about fees I'm receiving from a long time client and thought I'd tap the PLUG brain-trust to get some input.

This situation is this:

A few years ago I developed a PHP application that a client uses to run their business (its a typical LAMP platform). Without getting into tedious details, this software application is used to run their entire business. It is understood that the software ownship resides with me and they are paying for its use - licensing it, if you will. At the start of this project, we agreed upon a certain percentage of gross revenue that I would receive as payment for use of this software.

In return, I would maintain the software, provide various updates or additions, and some light server admin work to keep the application running. This arrangement has been working quite well and the business relationship is excellent. However, I feel now that the percentage I receive is too low (it hasn't been changed since the start of this venture). I have broached the subject of having to update our arrangement, but was met with some resistance.

I wanted to ask fellow consultants/contractor/software devs what is the "going rate" for such an arrangement.
Namely, if you are licensing a software product to a client for their use, what is a reasonable percentage of gross revenue a business should expect to pay. Especially, a software product that is the core component of their business without which the business wouldn't exist.

Any thoughts would be *very* appreciated.

Thanks,
Peter

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