purchasing source code from third party vendor

Question

Hi

Our company uses some third party vendors to write some of our external facing web sites, however with one vendor we keep experiencing over inflated charges for simple changes and it has been decided to bring the product in-house.

I have been tasked to provide a list of deliverables/checkpoints that would form a part of the agreement.

what is the minimum you would expect if you are purchasing the source code of a product that you have paid for the development of, should we expect code for any custom libraries they may be using that were written not for us etc..

This is all written in .net so i am well aware we could just get the code via reflector, however i dont think my boss would go for this ;-)

*EDIT*

We did not originally agree any rights to source code, however the vendor has agreed verbally that they will provide us with the 'source code' for a fixed fee, the fee is to be payed 50% upfront then upon agreeing that they have met whatever we agree on they will get the other 50%.

The 'whatever we agree on' is where i am trying to sort out, i need to be reasonable in what we ask for but at the same time we need to be able to move forward with this code...

Answer 1

This is far too general for a good answer. It depends on the vendor. In general, they'll be more interested in sharing code they wrote specifically for you, and much less so about sharing utility code they've written. They may in addition use third-party software (for development or as libraries) that they've got licenses for and you don't, in which they can't give you the whole thing. (Personally, if I were contracting with a vendor for a system, I'd try to get source code included in the deal.)

The fact that you're referring to over-inflated costs for simple changes suggests either that the vendor is greedy, and unlikely to give up this gravy train cheaply, or that you have no idea how complicated the changes are, and won't be able to handle it at all well in-house, or some combination thereof.

Answer 2

Your question is somewhat unclear: Did your agreement inlclude the source in the first place or not?

If it does then you already should have an agreement nailed down which should contain all deliverables. If you don't have it nailed down and the vendor is greedy as you wrote then I don't see much chance for him putting more work into it for free. So you likely cannot expect much in that case.

If it does not you cannot expect anything (Just being the first, or even only, customer for some component does not make you own it or have specific rights on it).

Answer 3

Honestly, this depends on your original contract with them - if you receiving the source code from them wasn't a part of the original agreement, then you're completely at their mercy as to what you receive from them, and you should set your expectations accordingly. I also wouldn't expect any source code for libraries not paid for by you - there may be licensing restrictions on these, though if they developed them internally, this becomes part of your negotiation.

That said, you can get them to do whatever you want if you pay them enough. If they do sell you the source code, they'll be losing you as an income stream, so they'll have to be offered enough that they'll be okay with that (for example, if you're giving them $5,000/month of business right now, reliably, then you can't expect them to part with the source code for less an $60,000, which is a year of what you'd pay them).

If you've got a positive relationship with them, or you're currently using them for additional development, you can leverage that - if they stand to lose other business from you if they're difficult about the source, then that weighs in too and will lower the price they'll accept.

In the end, it's a negotiation, and they are holding the upper hand because they have something you want - you'll have to offer enough that they're willing to part with their income. As far as refactor goes, be careful - you may be able to view the source code, but if you don't have a license to it, modifying it without their involvement may be setting you up for a lawsuit. Make sure you check your original contract terms - they're what's going to answer that question for sure, and make sure you get a lawyer involved if you're considering decompiling their deliverable - it's bound to be much cheaper than buying it, and you can't afford not to get a legal opinion on the contract.

Good luck!