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Currently I'm working as a freelancer, and for the first time a faced a client who wants the source code too.

This client owns a software development company, and wants to have rights over the source code, but that I keep my rights too. That means that they can use my code to make similar applications using my code for different customers and the same applies for me.

How much more should I charge my client?

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3 Answers 3

up vote 8 down vote accepted

As long as you have the rights to use the code yourself on future projects, get as much as you can and cash the check. Speaking from well over 30 years experience, source code rights are mostly bullsh*t. It sounds like a big deal, but it isn't.

If it's anything more than a toy program, they're probably going to have to come back to you for any substantial changes. Back in the 80's I sold DEC non-exclusive source rights to a search engine for well over $100,000. 18 months later they were back wanting over $50,000 in custom mods (based on my hourly rate). Why? Because they didn't have the talent available to come up to speed on 300,000+ LOC and make the mods in the time frame they needed them.

Bottom line: money for non-exclusive source rights is found money. Take it and take a vacation.

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Thanks. I guess I should just not take it as a big deal. –  Deivuh Aug 28 '12 at 18:16

Here are a couple of ideas:

  • Estimate (guess) how much money you are likely to make using the code in the future. Multiply that by something and charge them that.

  • Offer the source code on the condition that they do not sell products / services using it, and that they don't compete with you.

  • Instead of money up front, ask for a percentage of their gross income from any software / services they provide based on your product.

In all cases, get a good lawyer to advise you and help you draw up the contracts. There's a fair likelihood that your customer is one of those business who will "screw" you if it gets the chance. (The fact that the customer is even asking means that he/she/they think they can make more money than you will charge them.)


Your starting point should be that you already have a business model that is working for you. If there is a risk that this customer is going to undermine your business model, then you need to be adequately compensated.

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If you've got a business model based on cranking out minor variations on a body of code you've developed over years, I'd say charge the total development cost for all your stock code. I bet the customer decides either he doesn't need you, or doesn't need your source code.

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This sounds like a fast way to ruin a relationship with a client. –  GlenH7 Aug 27 '12 at 13:26
    
this is a new (ie; potential) client. I'm suggesting that this potential client either will accept your business practices or not become your client. –  ddyer Aug 27 '12 at 19:05

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