How to charge for web-based intranet apps

[multiplex77]

Hi,

I need to find out how software and consulting companies charge customers for web-based applications (to be installed on customers' servers)? Is it by number of users or for a single software license itself. It doesn't seem fair to charge more for a bigger company, and less for a smaller company since it all the software sits on a single server.

Please advise. Thanks very much.

 

[neilkonitzer]

Since you threw out the word "consulting"...

In my experience, it is best to charge for web-based applications based on the amount of time and resources required to gather the requirements, design the solution, and ultimately develop and test the application. This way, it doesn't matter whether the client is a Fortune 50 corporation or a small business with 25 employees. They're paying a standard rate for software development.

If you're planning to develop a commercial application for re-sale, then this is a whole different ballgame. Neil Konitzer
Freisoft

http://www.freisoft.com

 

[multiplex77]

Neil, Thanks for your reply. Yes, from a pure consulting standpoint, it is the accepted practice to charge by the man-days.

But mine is more of a "commercial application for resale". I don't see that many ready-made web based apps out there compared to desktop software, so I'm a little fuzzy about the way it is sold. My product is like a web-enabled version of the desktop software we previously sold. It won't be very commercially beneficial to us if we sold one license of the web version, as opposed to 200 licenses of the desktop version. But then again, we can't in good conscience charge the price of 200 desktop software licenses when the software is only sitting on one machine (the web server). Or is it actually okay and standard practice?

Thanks for your advice...

 

[mikeracicot]

There are plenty of companies that offer "off the shelf" web solutions. Easy formula for calculating price of software: Man Hours X Salary_per_Hour X 2.5 = $$$$$$. Pretty simple and will most closely reflect the consulting industry pricing in general. If you are doing a resale venture, then do a sales projection over the next two years, as long as there is no new development of the software, of your product and divide the cost by that number. I think you will be happy with your numbers. Anybody else have a comment on this? Mike Racicot
Ciber, Inc.
Sr. Quality Assurance Analyst