Re: Ada Developer's Cooperative License (was) Re: Market pressures for more reliable software

["Marin David Condic" <marin.condic.auntie.spam@pacemicro.com>]

Thanks for the reply. That clarifies a lot. Basically, if I understand you
correctly, the royalty would be 25% of gross sales, discounted by the
percentage of the contribution. I think that might be a little steep to keep
it attractive for an entrepeneur to want to use the code, but it is a number
to be kicked around. (Gotta find that balance where MC = MR!) I'd suggest
looking at typical royalty rates for things like books, music, movies, or
other types of "software" in which one party acts as a writer and another
party acts as a publisher. (What percentage of gross sales does Stephen King
get for a book he writes? What about lesser known writers? I don't see a
situation where the rate is constantly sliding or changes depending on who
wrote the code or what the subsystem is all about - it would just get too
complicated for anyone to want to deal with & they'd throw up their hands in
disgust and go write it themselves. Or do you see integrators negotiating
rates with individual writers over each piece of code they use?)

I'd still be concerned about the collection of royalties. In a one-to-one
relationship, the integrator of my software and I can negotiate the deal &
have the integrator send me a check once a quarter if that is convenient to
both of us. In a case where the integrator may have 90% of the code coming
from ADCL sources and there might be dozens of individual authors involved,
it would be difficult for the integrator to have relationships with all the
authors & track all the necessary payments. Likewise for the writers, they
wouldn't necessarily want to get hundreds of small checks from hundreds of
sources & track who should be making the payments. That kind of implies to
me a clearinghouse of some sort that gets some kind of dues and/or
transaction fees - as well as maintaining the ASIS tools needed to establish
the measurement metrics.

I would be interested in seeing how this could work. I'm thinking that it
ought to be possible to take some body of useful code and write some version
of the ADCL to put with it. It could be put on a website & see if anyone
bites. Would it get used? Would anyone start sending in checks - or even
bothering to contact the author? I'd bet that if *somebody* started making
even a *modest* amount of money distributing their software under these
terms, it would start breeding more writers. The question would be are there
enough integrators out there willing to use the code under those terms? No
way to really tell unless there is an actual experiment.

MDC
--
Marin David Condic
Senior Software Engineer
Pace Micro Technology Americas    www.pacemicro.com
Enabling the digital revolution
e-Mail:    marin.condic@pacemicro.com
Web:      http://www.mcondic.com/



"Robert C. Leif, Ph.D." <rleif@rleif.com> wrote in message
news:mailman.992577440.29640.comp.lang.ada@ada.eu.org...
> From: Bob Leif
> To: Marin David Condic et al.
>
> I will try to answer your questions. However, yours or others' answers are
> equally relevant. I definitely do not wish to be the sole author of the
> final license.
>
> 1) The royalties are paid after the supplier of the software is paid.
> Somewhere between 30 to 90 days after the money from the sale has been
> received. Traditionally, net at 90 days and some minor discount if the
> royalties are paid earlier.
>
> 2) The royalties are based on the total price paid to the developing
> organization. If the developing organization distributes directly, they
> should have a lower rate than if they distribute via intermediates. It
also
> depends on who pays for the advertising. I do believe that the total
royalty
> rate has to be announced upfront by the developing organization. To
simplify
> matters, I will assume that the product is distributed directly by the
> developing organization and that it does not have a significant
advertising
> budget. I would then guesstemate that the total royalty rate would be on
25%
> of the net of the sales. Items, such as shipping and sales tax, have to be
> subtracted first. I should note that I am R&D Vice President of my company
> and am not one of the individuals who would actually set this rate.
>
> Given my assumptions, I can now answer your questions.
>
>
> 1) My (MDC) code  (as measured by the ASIS tool) constitutes
> 10% of the overall product's source code.
>
> You price your shrink-wrapped product at $100.
> You sell 1000 units.
>
> a) How much do I get?
> 100 * 1,000 *0.25 * 0.10 = 2,500. This is based on the assumption that
code
> includes design, testing software, and actual testing.
>
> b) When do you write a check to so that I ultimately get paid?
> 30 to 90 days after receipt of payment from the customer.
>
> c) How do I know that you didn't actually sell 10,000 units and are only
> claiming 1000?
>
> This question is totally independent of the proposed royalty scheme. The
> licenses for my patents include the right to have an accountant audit the
> licensees' books concerning sales of my products. The Developers'
consortium
> could have this right.
>
> 2) You now sell 1,000,000 at $10. (Wholesale or retail?) Do I still get
the
> same percentage even though your costs are now near totally in the
> manufacture & distribution of the product, not in the engineering of it?
>
> Yes, because you are an investor. Others might believe that the royalty
rate
> should decrease. However, in the real world, these sales will require an
> upgrade. Therefore your relationship with the developing organization must
> be maintained. However, the developing organization has the right to
replace
> any of your code provided it does not infringe on your copyright.
>
> 3) The whole thing depends on basic honesty,
> relatively low cost to be honest and the fear of how expensive it would be
> to get caught cheating.
>
> Yes! And it would be very expensive if one cheated. The pool of developers
> would dry up and the authors of the Ada source would loose interest in
> maintaining it.
>
> I essentially agree with your other statements below. The bottom line is
> that we can use Ada technology to promote Ada and be justly rewarded for
our
> effort.
>