Licencing costs

[hyperD]

Many thanks for your replies chaps.

I guess it's a balance between a large capital cost up front for one system plus a % capital/new system or a risk on whether I can market this system through the global company via a fiscally attractive licence. The more the merrier without the client being put off by the total annual licence cost.

Unique hi-tech market so no comparison data available.

[malvolio]

Licensing costs is a bit dependent on how many you intend to sell a year and how much it cost to develop. Assuming you're planning on selling lots, divide the latter by the former, halve it (i.e. recover the cost over two years to keep the apparent price down) and add 40% to cover taxes and profits.

Licence fees are typically 15% of purchase price per annum. Upgrades are costed the same as licences but don't divide it in half (I assume developing upgrades doesn't cost anything like as much as developing the original!). Make sure you've got the licence terms, escrow and IPR sorted out properly as well.

[EqualOpportunities]

You could always do it the same way that Oracle do - write a number between 1 and 1,000,000,000 on a piece of paper. Fold, and put into a hat. Repeat a further 999,999,999 times. Retrieve one at random when asked for a quote for a license.

[privateeye]

If there is anything similar on the market check out their license arrangements - or if nothing similar check other software used in that sector to get guidance on what your potential customers will/do pay.

[hyperD]

I know this is going to be "how long is a piece of string" but can anyone point me in the right direction on guidelines on calculating a licence cost for a bespoke enterprise software application?

This could be "per user", per machine - I'm also interested in maintenance costs and SLAs and a guideline on costs/capital cost - whether it's loss leader on licencing and more on support/upgrades?

Many TIA.