* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

We're closed, folks!


» Business of Software FAQ
» The Business of Software Conference (held every fall, usually in Boston)
» Forum guidelines (Please read before posting!)


Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

reversing sale, suspect buyer wants for server use

I've just reversed a sale because the buyer has previously said he wants it for server use at his company. Our license prohibits buying regular licenses and using them for multiple users on a server. Obviously the guy hasn't read our one page license, found on our purchase page.

The company isn't a huge one but does contain quite a few people and is spread across many different physical locations, so obviously is bigger than our tiny mISV.

OK, all money is good to have. But I quoted this guy a specific price to allow him to use our software on a server for all employees at his company and directed him to the right part of our website to buy a server license. The price I quoted is pretty much at the lowish end of business-to-business software prices i.e. it will cost you a similar amount as 5 years' worth of certificates from Thawte. I did think if he didn't like the server price he should have got back to me for a reduction.

Our public license for regular sales clearly says it is not for server use.

What do you think? Was I right to reverse a sale?
Bobby Send private email
Wednesday, December 02, 2015
Hard to know the best thing to do when this happens.

One option would have been contact the company and explain the license violation and supply a quote to upgrade their existing license into the server license. Failure to comply would meen your legal department will be in touch (regardless if you meen to follow through). This at least opens a dialog to fix the issue.

By reversing the sale can you control via your licensing system that the customer can not run your software even though they presumably nite have a license key or file?
maxr Send private email
Wednesday, December 02, 2015
Yes, in this case the key has been deactivated.

Server licenses are more expensive than regular ones, because potentially tens to hundreds of people can use the software, rather than just one.

The purchase was made using a free email address rather than a corporate one, so I suspect it is an employee (with the same name that contacted us multiple times about server use) who purchased the key with personal funds just to get a project at work done!

It is understandable, but a bit cheeky, and potentially a company larger that our one saves some money at our expense.
Bobby Send private email
Wednesday, December 02, 2015
Of course you had the right to do this. This person broke your license agreement which is ***legally*** binding.

I'm just glad you had the right technology in place to track what he was doing!
Nicole Miller Send private email
Wednesday, December 02, 2015
Bobby, I personally would not reverse a sale.

I assume you were contractually and thus legally in your rights to do this, so I won't address the legal aspect.

Instead I'll address the strategic aspect: It's a violent act towards the customer and there's no way they will like that you stopped them getting away with something.

How I handle this is I let them ride, and then I stop them from getting updates because of problems with their license. They are then forced into the position of contacting me to find out, and then I note that their license is outside scope. I do this in a very non-accusatory way to help them save face.

So far this has worked for me. Instead of getting pissed off and taking off because I outed their corrupt cheating nature, they upgrade to the proper license.
Scott Send private email
Wednesday, December 02, 2015
Thank you for your reply Scott.

I exchanged at least 30 emails with the guy before he purchased and it was after I told him about the right license to purchase, that he purchased a discounted license of all things.

I was concerned that if I let the sale go unrefunded that it would be some kind of agreement on my part as the guy told me before he wanted it for server use.

My concern is that this software company effectively sells software products that do many things and sort of need the extra functionality my software offers. Their website even alludes to the general functionality my software product is in.

So I was worried they would buy one license and then incorporate it in one of their servers and as things progress it will end up getting used by all their customers. Maybe this wouldn't have happened.

But really losing one discounted sale (not even a regular sale) and then have some big clients of theirs getting my software for next to nothing would be bad.

I've previously had one little company buy my software at a discounted price for small companies and then get purchased out by a huge multinational company and then this huge, famous company ends up using my software originally purchased at one-quarter of the cost! Anyway that got nipped in the bud, when they contacted me for upgrades!

In summary I could end up having my software used by 10 huge companies (all clients of the purchaser) and I would have been paid next to nothing for it.
Bobby Send private email
Wednesday, December 02, 2015
What happened is one software developer was given a task to do, which was a little bit specialized and would probably take him months to do and required special knowledge. He couldn't do it in the time and so unsurprisingly looked on the Internet for a product to do it.

It explains why pretty soon, he asked if he could get the source code. I refused.

It seems he had no real managerial sign-off to buy a third party product for this and was hoping to buy something cheap, likely using personal funds.

His original intention seems to have been to incorporate my product into their  server product which is installed on their clients around the world!!!! And somehow not paying the going rate per separate client installation on the grounds that only their staff would be using it!

I am filling in the gaps with what I guess from the bits emailed to me, but I think this pretty much sums up what went on.

Anyway to date the guy doesn't have any permanent registration keys and has seemingly giving up his desire to install my software on a server in each one of his company's clients.

But my mind boggles at the craziness of his initial thought i.e. incorporate my product (potentially with my source code) into his company's server product and then install it at each of his company's clients on the grounds it will be okay, because he says only his company's staff will use the new functionality! Ha! This doesn't seem believable. As things go, one person uses a product in a company and if it fulfills a need, in the end tens of people will.
Bobby Send private email
Saturday, December 05, 2015
IMO, it's easier to find a way to have the software enforce it's own limitations rather than doing it by policy.

Some ideas:

- don't allow the single-user version to install on server OSes (i.e. installs on Windows 8, but not Windows 2012 R2 -- the anti-virus app I use does this)

- limit the operations it performs to X per second/hour/day so the single user license isn't appropriate for a server

- phone home to activate the license/key. Have your central server keep track of activations and only allow 5 before they have to contact you to increase the count.  You could include a MAC address from the server to have a unique server ID.

- put something in the output or on a visible part of the user interface that shows "Licensed to Bob Jones, bob@hotmail.com"

Scott's right.  You don't want to become your customer's enemy.
Doug Send private email
Saturday, December 05, 2015

This topic is archived. No further replies will be accepted.

Other recent topics Other recent topics
Powered by FogBugz