Royalties software development

Whether the software royalties should continue indefinitely, one should figure out what happens after developing version 1. If the software developers' input stops there and other developers end up taking the application further , perhaps the software developer should expect royalties to stop at some point too. This becomes tricky when the client insists on owning the adapted source code which you originally owned. The client should pay for the initial source code if he wishes to take ownership of the final "adapted program.

Therefore, software ownership must be clearly defined at the beginning of the contract. The software developerment phase is more risky because the software developer needs to have a saleable application before earning revenues to recover sunk costs. When adapting existing applications the developer owns for clients, the astute software developer should consider "how much work do you need to put in before the application becomes "saleable" and whether the clients pay for additional software development.

Don't forget the latter phases of the SDLC process. By entering fee schedules and royalty rates, Workspace establishes the … Read More. The Sponsorship module is designed to facilitate the end-to-end process of managing sponsor activities for both sponsors and sponsorship seekers. Tracking sponsorship inventory, assessing and tracking opportunities, formalizing contract terms and requirements, tracking rights and deliverables and assessing approval needs.

Skip to content Search for:. Developing software and expecting royalty rates can be tricky when working at a discount. Software developers are taking on risks beyond their control. For example, the marketing partner may not be able to execute or the market may not be receptive to the product. A good option is to work for full rate or close to it , and set up a software development royalty structure that kicks in after a minimum number of sales enough for them to recoup their costs.

This will minimize software developers' up-front risk and provide some back-end cash if the product becomes a huge success. Royalty percentages depend on the size of the software developer's investment in time vs their investment in time and money. Most royalty agreements are for licensing an existing marketable technology.