software, pricing, distributionHow does a software/data company typically license software/data with redistribution rights? What are the pricing models?
I can think of two examples:
Are there others? Which ones are the commonly used?
What sounds good for your software? What would someone be willing to pay you? What will the volumes be?
I would say the most common is a fee per license as per your part 2. That means you share in reward, but you take the risk that no copies are sold.
Someone may offer to take on a one off license, but then they have taken the risk and reward from you.
Beyond pricing, are you going to let them change the source code? Are they allowed to resell it seperately? When the end user gets the product can they use it only as part of the bundle, or can they use/sell it seperately. Will you require them to state your software is involved and add you to their copywrite notice?
You may start by looking at some other software licenses for redistributed software. For instance you can buy an ‘Application Specific Full Use’ license for Oracle DB to bundle with your software, but the end user can only use it in conjunction with the bundled application.
License is a tricky issue and raising a similar question under the law exchange might be worth considering. I have always believed you could put anything into a contract and the customer had only to accept and continue, or decline and not use, but this is not true. It is possible that your license could contain a clause that a court could consider overly restrictive in which case the clause, or the entire license could be considered void.
I believe there are (or were?) issues within the EU related the Microsoft licenses which were for one user one machine. If your machine died supposedly it would be illegal to install the OS on a new machine. Or, if someone was to buy your machine, the buyer would legally not be permitted to use an OS that was initially licensed to you. No EU court tested the license (because I suspect, Microsoft failed to test the limits of the EULA (End User License Agreement).
You need to think your licensing thru carefully - if it is legal but considered overly restrictive you could upset customers who could eventually consider using a competitors product.
Options that come to mind:
An extra option you could offer is pricing of licenses change if the customer undertakes a support contract which includes free updates of new features/functionality and not just bug fixes. You could then “rent the use of the app” instead of selling it. It gives greater flexibility to the client, it keeps their costs low and gives you a constant income stream.
Final thought: I suspect that since installation media is rare these days, we’re talking about downloads. If the software requires network access, consider terms and conditions permit you to perform occassional checks (once a month) whereby the application pings your license server. If you follow this method, you need to consider how the licensee will use the application if you no longer operate a licensing server on the internet.
Best of luck!
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