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I am installing free standing smart safes at our sites. The safes come with software for making deposits. We requested changes to the software to fit our industry; the changes to the software will allow the seller to market in our industry. The seller is wanting us to pay for the software development. I understand there is no free lunch, however, I'd like for the seller to have some skin in the game too.

My question is: what is the norm for these type of deals and what would be an equitable outcome?

Jeff

bteachman's picture

Jeff,

Welcome to the forum.

I have had this come up a few times. Here are the rules I fallow

1) If you have not purchased the software or hardware yet, work it into the price. If it is some thing that would be reused by more then a few people then I would would not pay for the development. If they won't, just talk to some other vendors. In my experience one vendor is already playing with any change we thought of.

2) If you already purchased the software, you are between a rock and a hard place. If some day you need to add purchase more safes, it may be best to work it into the price of that.

With a change that would be used by another person or was added to there standard package I never pay, but I work for a larger company. I have had to pay up to 1/3 of the development cost on options that would not be used by other people. But most of the time i make my requests general enough that other people can use it.

Good luck.

bteachman's picture

Jeff,

One thing I forgot to mention, show the vendor or manufacture the benefits. For example, the last time I had to go through this the vendor came back with a cost for development (Example: 60 hr * $100). I went and did a cost justification of the project. In the justification form I made I put the projected growth in the company (200 installs over 5 years), cost to do the change in house (in our case it would have been a complete rewrite), and a write up of how this change could be used in other industries. I then sat down with the sales rep and talked it over and gave him 4 copies.

I will see if i can find one that is not confidential I can post.

jtrad's picture

Brandon,

Thx for the reality check; your affirmation is really helpful.

Your idea to sit down with the seller to point out the advantages of the development is fabulous - I'll build the rationale and let you know how it goes.

I greatly appreciate your insight - thx!!

Jeff