Question Charging for software maintenance agreements

sbostedor

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Feb 15, 2006
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Michigan
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10+
I have a friend who has written a custom program for a client in the medical industry. The client paid him an hourly rate to develop the software.

Now that the program is done, they plan to use his software in the course of their medical services as well as sell licenses to the software to other clients who do not require their services but would use the software on their own.

They are asking him how much he would charge as a maintenance agreement to support the software that he has written for them. This is only to support the existing feature set, not to add more features.

He's at a loss of what to charge them and so am I. Does anyone here have an opinion?
 

picoflop

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Feb 25, 2009
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10k Users calling every 5 minutes day or night?

Depends on so many factory that it hardly can be said if you are in the 10$ or 10k$ range. imho

If support only means that the initial company can contact him during business hours to report errors etc, I guess that you get to something like 10-50% of the project price for maintenance per year.
 

jackmac

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Apr 20, 2005
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9
Programming Experience
Beginner
What about offering a flat fee and a per-call rate?

A tricky one but what about trying the dual approach? Your friend could charge a flat fee per licence sold on, perhaps a 50 - 60% of the original licence fee. Your friend would need to be sure their client didn't charge way over what they were charged themselves. (There would need to be a ceiling set for what they could charge).

If there was a charge per call then the potential to make money would be there. Your friend would need to put a 'working hours' agreement in place to ensure the phone doesn't ring at 3am. There could be the potential for an 'emergency' call rate which kicks in out of working hours. This would discourage users from calling with stupid questions in the middle of the night too.

Hope that helps
 
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