In the same way we mayed a way to convince them that the use of interoperability also saves them a lot of money in the long term and gives them bargaining power when purchasing software from different vendors.
Nandalal
Thomas Beale <[EMAIL PROTECTED]> wrote: David Forslund wrote:
> I am familiar with this problem. It seems to me to stem from negotiating
> the wrong kind of contract. I don't think FOSS helps that much because
> the contracts seem to me to be negotiated from ignorance. If the local
> organization demands interoperability BEFORE they sign a contract they
> will have more power over the provider. If they don't understand the
> technology
>
this is a little bit off the topic, but Dave's comments here just
reminded me to post something we have been finding useful in negotiating
contracts (as a software vendor) where the software is FOSS (my company,
Ocean Informatics is offering a GPL or commercial licence choice to
buyers). Anyway, recently we had a conversation during the negotiation
phase with one very large (typically skeptical) company that wanted our
software development expertise but of course wanted to own all the
software we developed for them. We on the other hand try to build things
very generically, and don't want to go around having to rewrite all the
time due to not having access to the IP. We took a pretty strong stance
in the negotiation on open source. In the end it came down to them
saying: why should we pay you to develop your product? Well, of course
we said the obvious things like:
- it's your product too. You set the requirements, not us
- you'll get the benefit of maintenance and bugfixing due to wider use
than just you
- etc
But in the end the argument that they understood was this:
- every piece of software has a total cost over its lifetime. It is
commonly accepted that the build cost to first deployment is roughly 30%
and that the cost of maintenance and enhancement over the remaining life
of the product is 70% (obviously this varies but it's a pretty common
figure given in the literature).
- so you (the customer) are paying for 30% of the total cost, upfront
for a generic component.
- we (the builder) pick up 70% of the cost, in an incremental ongoing
fashion.
- You get free access for the life of the product.
Now, if we just charge reasonable contracting rates to get the thing
built, the price the customer pays is the price of building it. But what
they get is a lifetime of use, including all updates, upgrades etc etc.
This is all obvious to people on this list, but not to most corporate
customers. I don't know if this particular way of justifying open source
in contracts is commonly used or described in the open source
literature, but for convincing hard-nosed businesses who are most
interested in monetary arguments, it works quite well.
- thomas beale
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