OT: Software Licensing Fees

[Mark Phillips]

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 at 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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