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So far, I have coded multi-user applications either used by client's company staff or by clients selling them via some web application shops.

Now, for the first time I was hired by middle man who disclosed his plans :). He wants me to make enterprise multi-user application which he will sell to another company. I know that app will be used by XY number of users and I have to calculate the price for development + distribution to XY number of users.

Let's say that the price of the whole development process will be $10.000 (sum I am charging middle man). How shall I calculate the price if the app will be distributed to 100 users?

Peter MV
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  • Are you not going to be involved in maintenance? If not, who is going to maintain it? – jmort253 Feb 23 '14 at 02:15
  • I will maintain it. Why is it important? – Peter MV Feb 23 '14 at 07:38
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    It's important because you'd want to factor that in the cost too, and you didn't mention it. – jmort253 Feb 23 '14 at 07:41
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    That's after release support. I will just calculate work hours spent on fixes or new features and add 100+ users' pattern. Right now I need to know how does this pattern look like. – Peter MV Feb 23 '14 at 07:45

1 Answers1

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It's difficult to say how much exactly you should charge the company for your app without knowing much details, but here are some pointers. Apart from man hours and logistics value required to create the app you must consider the technical and functional value of your app. Pricing could be evaluated from the answers to questions below-

  1. How much value or ROI will it bring to your customer (The "Company")?
  2. How scalable is your app? i.e. How good it can handle from a 100 users to 10,000 users. And how expensive would be the infrastructure to support such scalability?
  3. How much platform independent your app is? Would it run on Windows, OSX, UNIX etc.?
  4. How likely are you and your app are to get replaced by your competitor and how much your competitor values and prices their app?
  5. How user friendly and upgrade friendly is your app? How secure is your app?
  6. How are your post sales product support? (Because a bad post sales support is a huge detractor, which could make your customer move from you to your competitor) Would only "you" be enough to support this app if they were to increase the number of users from 100s to 1000s?

Again, these are just pointers because there could be a lot more to it based on the complexity of your deliverable, the desperation of your customer and the market stand of your competitor.

It would also be important to understand whether you plan to sell just single user or multi-user licenses or would like to sell your app altogether. Software Licensing and selling/ownership are different ballgames altogether as you may already know. Licensing could make your liability more than just selling the app so you need to have follow appropriate legal procedures and/or have ample insurance in-case your app were to screw up $1Mn worth of customer's production data, cause a major loss, or cause security leaks/breaches. But if you sell it, the app pretty much belongs to your customer and so does the source code and so does the liability since you loose ownership of the product and the flexibility of making money by selling it to other "similar" customers.

Anjan Biswas
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