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Royalty Free Components

Joel,

I don't get this point:
Anybody who ever tried to sell software components (ActiveX controls, beans, etc.) knows that you have to have a royalty-free runtime or no developer will touch you with a 10 foot pole. Microsoft even lets you redistribute Jet, a complete relational database engine that is 9/10ths of Microsoft Access, for free. Heck, it's preinstalled on Windows 2000.

---

Without going into details, my company has a SDK. (There are currently no other SDKs on the market which do what ours does.) We had been giving it away for free, but recently we started charging $X/developer.

I suggested that we also charge a small amount of money for royalties for the run-time. This way, obviously, if an application was created which uses our SDK, and it sells a lot of copies we would make some money. To me, this is JUST LIKE WINDOWS! Microsoft doesn't give away Jet! People have to buy windows to use Jet, so Jet becomes yet another cool feature of Windows and another reason to develop on the Windows platform.

Anonymous
Saturday, August 31, 2002

No, that would be like paying royalties to Microsoft for each application that you launch under Windows, or for each document that you create with Word.

Frederik Slijkerman
Saturday, August 31, 2002

When you charge royalties to use your components you are putting a burden on the developer (not the end user) to administrate this.  If a developer writes an application that requires Windows, they don't have to pay Microsoft anything to use their runtime (Windows).

Charging royalties for components puts the burden on the developer to make sure each customer has a legal license.  With Windows, the customer has to make sure they have a legal license.

Also, what if a customer has two applications which use your runtime.  Does the customer have to pay for two royalties or one?

Troy W
Saturday, August 31, 2002

Anonymous,

Start looking for a new job.

Now that you are charging for your SDK, especially with a runtime charge, you have opened up the competitive field to other companies that can duplicate your SDK and sell it in the manner in which the marketplace desires: One time charge (or free), and no run-time royalties. Someone may even decide to Open Source it.

Unless you area is so specialised that no one can enter it (highly unlikely), then you have just given your competition the weapons in which to wipe you out.

As I go looking for developer tools and components, if some product wants a run-time royalty, they do not even get a look in. Immediate hit on the <back> button and a return to the next tool/component on the list.

Evan
Saturday, August 31, 2002

"This way, obviously, if an application was created which uses our SDK, and it sells a lot of copies we would make some money."

And since so much money is being made it suddenly it makes alot more sense for me to just develop that in house and drop your SDK.

And not just cause of the sheer cost, but as has been said the administration adds to it as well.

I'm really just adding my "me too" to Joel and most posters on the list.  No matter how neat or cool the product at the first mention of run-time royalties I'm gone.  It's just not worth the hassle.

Later,

Wayne Venables
Saturday, August 31, 2002

All good points that I hadn't thought about. Take note though, I had only suggested royalties, this pricing scheme had not been accepted by the business folks. Thanks, I was wrong to suggest royalties and I will point that out to the business folks next week.

Thanks.

Anonymous
Saturday, August 31, 2002

In every project I worked on run-time royalties were a big no-no. Sinking a cost for the aquisition of a lib or tool is no problem (appart from the technical). With royaltees you start giving away a steady percentage of your income, putting a serious constraint on your margin play. Furthermore, it often limits what you can do with marketing (free-trials, free-stripped etc.), and generates all sorts of accounting difficulties.

Just me (Sir to you)
Monday, September 02, 2002

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