Plan B - Getting to grips what 'real' businesses charge for software

[Pondlife]

how long is a piece of string

I've seen companies spend £1.5M to implement SAP at one site and others who've spent Billions to roll it out globally. These are implementation costs not software dev.

I have two projects on the go at the mo. One has a budget of $8M the other $0.5M, both are similar but the complexity and scales are different.

[vetran]

there were some good links on here a few weeks ago. They made the point that the first thing you sorted was the price & Market before you fired up the IDE.

The key thing is not how much it costs but how much are they are willing to pay.

Oracle & SAP charge shedloads because people are willing to pay.

If its a big number then you need to know how much the client is willing to pay up front & organise scheduled payments so you aren't out of pocket if they change their mind/run out of cash, fastest way to bankruptcy to ignore that.

Bespoke software which is either T&M for quote (or if small job you can take a flyer) then a fixed price on a defined specification or T&M for the lot with an estimate + deviation.

A product (where you develop to sell to multiples) is different.

[AtW]

Have a look at Oracle licensing costs and your figures look like small change!

And that's for off the shelf software....

It's a very tall shelf that requires specially trained and licensed staff to pull that software from...

[AtW]

My budget for this year is $1.6m.

I thought you had position of responsibility???

[NotAllThere]

To get a ballpark figure, multiply the number of days it takes to develop by daily rate by number of developers, divide by the number of units you expect to sell in a year. So, if it takes 3 of you 60 days to make the product, and your usual daily rate is £400, and you think you'll sell 2, you should be thinking of ~£36K. You might end up selling it for £5K, or £100K (to a large company). Then 15% of the sale price is the annual maintenance fee - also payable in the first year, pro-rated.

[proggy]

Always start high expecting to be negotiated down as bit. So Add 20% on your price based on hours and be willing to negotiate down.

[AtW]

Why ask for trillions when you can ask for billions?

[MarillionFan]

I thought you had position of responsibility???

I'ts 1600 times your turnover.

[AtW]

I'ts 1600 times your turnover.

[Freamon]

It's hard to come to terms with the numbers.

I was on a project where 500K (half a million £) was paid to Bob to develop a tool.

I was on a site visit and found they had not developed the tool, they just had a guy in the corner doing it manualy when required.

Was his name Atul? They probably just misinterpreted what they were asked to do.