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Thanks so much for this comment. You've got me thinking. My mind certainly hadn't gone to real estate on this. The hard part here is always leaving enough fl
by kemitchell 5y ago
Thanks so much for this comment. You've got me thinking. My mind certainly hadn't gone to real estate on this.
The hard part here is always leaving enough flexibility to serve a lot of potential products and business plays. When the software is mass market, bound to do a lot of self-serve online sales, that's going to overwhelm any benefit from "gaming" rack rate. I'm not concerned. The prickly case is relatively niche products licensed for big dollars to relatively few customers. If your market is six big firms, so your upper bound is six total deals, you're not losing much by gaming your published figure. With six you probably don't advertise a figure, since you can tell your whole market with six sales e-mails. There might be an unhappy medium between that tiny addressable market and a mass market where both advertising pricing and gaming advertised pricing makes sense.
A lot of software shops do state a fixed per-seat, per-code, or other incremental rates. Perhaps with volume discounts. I don't think that actually hurts the license, since that tends to bound negotiations, based on publicly available evidence. But it's just as common for those pricing pages to have, say, a one-user price, a ten-user price, a fifty-user price, and "call us" for anything above that, which might still be priced by user, but might be all-you-can-eat for a flat fee. There's market segmentation, and it may not be immediately obvious which segment corresponds to the company requesting an offer. If it falls in the "call us" segment, there won't be an advertised price, so the definition of "fair price" in the terms falls back to just "a fair market price for a fair commercial license".
I follow the logic of a stated upper bound. But I'd have no idea how to set one dollar figure for every project that might use the Big Time License to reach small businesses. The temptation would be to give a lot of headroom, which could make customers nervous. Why am I looking for comfort from a $500k/year figure for this library with competitors selling $3k perpetual licenses? And from the business side, I'd never tell a software company, especially one focused on a single product, to publicly cap how big its sales can be. That could be the effect, since a big company could ask for an offer under the license, receive one, point to the definitions of "fair", and cry foul. Big hassle.
- stickfigure 5y agoI'm just saying that as a consumer of software, I am wary of subjective terms like "fair" that I can't afford to litigate. Yeah, pricing software is hard and of course the seller wants to tailor each deal to the customer... but if the customer is already dependent on the software, the power relationship is lopsided. As a customer, if your software is something that I can fairly easily replace, then sure this license is not scary. If it's critical to my business, this license is the same as a "trial period" and I need to have some idea what happens at the end of the trial period so I can compare it against the alternatives (competitors, build in-house, etc). Examples: Some random image processing library - sure, I can probably find or make alternatives. Some exotic database - probably not, too much lock-in.
- kemitchell 5y ago"Fair" can express an intuition, in addition to objective standards. Which is why Big Time adds both context and definitions to flesh it out. A bitter dispute about those terms could result in litigation. But the overwhelming majority of contract disputes don't go to court. Sides figure things out based on estimates of their odds in court. The defined term "fair commercial license" only matters if you fall outside the definition of "Small Business", reach out for a paid license proposal, and don't see receive proposal you think meets the definition within 32 days. In other words, if negotiations for the license totally fail. At that point, if the developer is dead convinced they've made proposals meeting the requirements of Big Time, and your company continues to use the software, they can sue you for infringement. Which, in all likelihood, will just result in another round of license agreement negotiations, this time with lawyers. If you get to the point where a piece of Big Time software is worth that much to your business, even if it still counts as a "Small Business" under the terms, there's nothing to stop you reaching out to negotiate paid terms ahead of time. In sum, both the value of the software to your business and the extent to which you're even worth pursuing in the first place will affect the way things play out in practice. FRAND-like commitment aside, compared to the traditional, closed-and-proprietary approach, the difference with Big Time is that noncommercial and small-business users can have the software for free, and everyone can see the source code.
- onphonenow 5y agoAgreed. Ideally it would be up to 2% of related product revenue up to $500K per year or whatever so there was some kind of fallback cap or similar.