I read posts on a software development message board frequently. Mostly these are guys that have started small companies to sell shrink wrapper software. One guy from Australia said he encountered a request from a United States state government agency. They wanted to purchase a license for his source code. They wanted to do their own modifications. The software author wondered what to do.
Here is a little more background. This guy sells an application for $150 a copy. This state government has a 1000 user license which cost them $5500. Some people commented that big agencies like to make sure they can continue to use the software even when the manufacturer goes out of business. This seems reasonable. But how do you come up with a price to charge the government for such a request?
You could calculate how many hours it cost to write the software. Then you could apply some hourly rate such as $100 per hour. Finally you could multiply that by a factor which represents the loss of you selling the license. Suppose it took you 1000 hours to write the software. At $100 per hour that would put you at $100k. From there you would apply some multiplier such as 2 or 3 to get the final bill.
Now I do not have any successful software selling for $150 a pop. But if I did, I would think that you could charge whatever the government was willing to pay for a license of the source code. This guy sounds like he is in business after all. It is just another type of business transaction. Of course he would probably have to go through some justification on how he arrived at the cost. But in the world of the government, there is probably a huge budget. A couple hundred thousand would be no big deal.
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