determine the value of code?
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Hi, Is there some official formula to determine the price/value of code? i mean , is it: 1) the amount of hours it took to develop it * aprox_price_for_a_consultant 2) the estimated profit from licenses for a period of 3-5 years 3) what it would cost to hire someone to do it i personally think it has to be something like (2) but what if it is code that is not supposed to be sold , say its code for some inhouse thing , does that code have a value? any ideas? //Roger
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Hi, Is there some official formula to determine the price/value of code? i mean , is it: 1) the amount of hours it took to develop it * aprox_price_for_a_consultant 2) the estimated profit from licenses for a period of 3-5 years 3) what it would cost to hire someone to do it i personally think it has to be something like (2) but what if it is code that is not supposed to be sold , say its code for some inhouse thing , does that code have a value? any ideas? //Roger
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Hi, Is there some official formula to determine the price/value of code? i mean , is it: 1) the amount of hours it took to develop it * aprox_price_for_a_consultant 2) the estimated profit from licenses for a period of 3-5 years 3) what it would cost to hire someone to do it i personally think it has to be something like (2) but what if it is code that is not supposed to be sold , say its code for some inhouse thing , does that code have a value? any ideas? //Roger
That formula should be multiplied by a language constant to get the real value of the software. After all, everybody knows that the universal VB constant is 0. On a serious note, I don't know what do you mean by 'value of code'. If you are measuring assets of a company, most big companies here use the money spent to develop it as the value and depreciate it in 5 years. Trying to make bits uncopyable is like trying to make water not wet. -- Bruce Schneier By the way, dog_spawn isn't a nickname - it is my name with an underscore instead of a space. -- dog_spawn
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Hi, Is there some official formula to determine the price/value of code? i mean , is it: 1) the amount of hours it took to develop it * aprox_price_for_a_consultant 2) the estimated profit from licenses for a period of 3-5 years 3) what it would cost to hire someone to do it i personally think it has to be something like (2) but what if it is code that is not supposed to be sold , say its code for some inhouse thing , does that code have a value? any ideas? //Roger
The real answer to this question is really "How much is anyone prepared to pay for it?" but if you really want to try to construct some kind of approximation: The value should be the cheapest alternative of the three with the following modifications: 1) hours * min_price_for_a_decent_consultant 2) est. profit from licenses for the expected lifetime of the code And you need to add atleast another factor: What are the competition doing and how much does their soultion cost? And if the paths that I have followed/have tread against the flow/there is no need for sorrow I am coming home Return, Crüxshadows
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Hi, Is there some official formula to determine the price/value of code? i mean , is it: 1) the amount of hours it took to develop it * aprox_price_for_a_consultant 2) the estimated profit from licenses for a period of 3-5 years 3) what it would cost to hire someone to do it i personally think it has to be something like (2) but what if it is code that is not supposed to be sold , say its code for some inhouse thing , does that code have a value? any ideas? //Roger
If the code is unique in solving a known problem, or creates a new niche market then it's worth it, and finding the value is pretty complex. Otherwise, if the code doesn't add anything new to the game, its value is exactly 0$.
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That formula should be multiplied by a language constant to get the real value of the software. After all, everybody knows that the universal VB constant is 0. On a serious note, I don't know what do you mean by 'value of code'. If you are measuring assets of a company, most big companies here use the money spent to develop it as the value and depreciate it in 5 years. Trying to make bits uncopyable is like trying to make water not wet. -- Bruce Schneier By the way, dog_spawn isn't a nickname - it is my name with an underscore instead of a space. -- dog_spawn
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If the code is unique in solving a known problem, or creates a new niche market then it's worth it, and finding the value is pretty complex. Otherwise, if the code doesn't add anything new to the game, its value is exactly 0$.
IMO if someone asks you "what is the value of code" it is a trick question. Only someone of *ahem* limited intellect would actually come up with a formula. Obviously code only has value if it achieves some objective. In other words, does it do the job? Basically, if you are asked that in an interview, for example, don't start going on about lines of code multiplied by whatever, because they will think you are an idiot. Harsh, but true. As for the market value of a project, well, what are the competitors charging?
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IMO if someone asks you "what is the value of code" it is a trick question. Only someone of *ahem* limited intellect would actually come up with a formula. Obviously code only has value if it achieves some objective. In other words, does it do the job? Basically, if you are asked that in an interview, for example, don't start going on about lines of code multiplied by whatever, because they will think you are an idiot. Harsh, but true. As for the market value of a project, well, what are the competitors charging?
dog_spawn wrote: As for the market value of a project, well, what are the competitors charging? At this point it's also a matter of volume, especially if you get to arrange a bundling agreement.
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IMO if someone asks you "what is the value of code" it is a trick question. Only someone of *ahem* limited intellect would actually come up with a formula. Obviously code only has value if it achieves some objective. In other words, does it do the job? Basically, if you are asked that in an interview, for example, don't start going on about lines of code multiplied by whatever, because they will think you are an idiot. Harsh, but true. As for the market value of a project, well, what are the competitors charging?
the reason why i asked this is that here in sweden you need some $15 000 to start a company with shares (i have no idea how to translate that:P) its not a cost , you only need to prove that your company contains a total value of that when you start it , and it doesnt need to be in pure cash , it may be in office furniture, computers etc etc.. so my idea was to see if its possible to use source code for this.. and since our products have brought more than that in license profit in a year, i was guessing that the code for those products must have some kind of value?? //Roger
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dog_spawn wrote: As for the market value of a project, well, what are the competitors charging? At this point it's also a matter of volume, especially if you get to arrange a bundling agreement.
oke , i didnt specify , but what i was looking for is the value of the "rights" of the source code , not how to set a price for the licenses or whatever. //Roger