Our company currently provides custom software products for many different industries. Many of our solutions are end to end business solutions that often include multi-integrations to third party API's that eventually require an SMA (Software and Maintenance) agreement by the end or during the project development and upgraded cycles. I am having trouble in trying to price these agreements.
Our SMA Agreements do not cover new development or new projects related to the covered software, only support and maintenance of existing software. Typically in my research I found the the cost of an SMA for different complex software being sold, cost about 20 to 22 percent of the cost of the software.
I have a situation where a client has spent about $350K on a custom solution from us and it is quite sophisticated. If I were to charge him %20 per annum, it would cost them 70K or $5,883 per month. This seems excessively high. We also have a clause in our SMA that we review the SMA quarterly to take into account new development costs that are added to the SMA agreement after the initial SMA agreement goes into affect. This particular client also currently owes my of 50K that he trying to catch up on from previous development.
Any advice you can provide me would be greatly appreciated! Thank You!
Our SMA Agreements do not cover new development or new projects related to the covered software, only support and maintenance of existing software. Typically in my research I found the the cost of an SMA for different complex software being sold, cost about 20 to 22 percent of the cost of the software.
I have a situation where a client has spent about $350K on a custom solution from us and it is quite sophisticated. If I were to charge him %20 per annum, it would cost them 70K or $5,883 per month. This seems excessively high. We also have a clause in our SMA that we review the SMA quarterly to take into account new development costs that are added to the SMA agreement after the initial SMA agreement goes into affect. This particular client also currently owes my of 50K that he trying to catch up on from previous development.
Any advice you can provide me would be greatly appreciated! Thank You!
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