software, accounting, licensing, applicationsI’m about to design, develop and provide an embedded software for an specific electronic circuit module which manufactured by a local, medium scale home appliances manufacturing company.
They would use my software with their specific electronic module, to build more interactive home appliances and equipments.
I’m about to ask for a license fee for each and every install that they are making monthly.
Since this software sits on a chip, installation would be done by an operator at the manufacturing company. And for ease of production and due to using of assembly lines, I can’t demand or force the client to use any licensing process on each chip like the desktop software applications do.
So it is vital to know the figure of total manufactured equipments with my software module per month to get paid fairly.
I would try to get a contract with them that requires them to provide you with the monthly figures you need in a simple-to-read format, and include the option to audit their production numbers at any time (in a way that doesn’t unreasonably impact their operations). That will probably convince them to keep the numbers accurate, even if you never exercise the option to audit.
This is a really tough one because of cultural differences. While you're usually safe in assuming US or European firms mean it when they commit to something, the same doesn't hold as much water when dealing with businesses in countries where acknowledging "no" is tantamount to losing one's face. In the latter, it's not unheard of to say "yes" while using tone or body language to hint "I wish yes, but actually no, not really" and later wiggling out of what you thought they had committed to or - worse - continuing full steam ahead irrespective of the proverbial disaster down the road.
On paper, @BrettFromLA suggests the correct approach: throw in a clause in the contract whereby you can show up at will to inspect the production lines and get a feel of volume. In practice, don't set your hopes too high up because any number of issues can get in the way of that being enough.
For one, manufacturing lines don't always operate continuously, which throws the notion of "just show up on Monday and assume it operates 24/7 at the same rate" out the window. For another, businesses can outsource, and you'll have precious little leverage on what goes on once a few layers of suppliers kick in. Considering how the likes of Walmart or Apple struggle with keeping their own supply chains clean, don't put too much hope on your ability to enforce correct reporting.
As such add the clause, and do inspect from time to time, but be mentally prepared to accept the grim reality that it won't necessarily be enough and there isn't much you can do about it if it isn't.
With that being said, might having some kind of smart phone app communicate with the appliance make any sense? What about providing automated firmware updates? Neither approach is perfect, in that not everyone will want the app nor will everyone update, but they can be used as indirect proxies to monitor your install base. (Make sure they make sense, too: developing a pointless app would bring you no insights whatsoever.)
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