What's the normal markup for the price of an appliance from a software vendor? The appliance comes loaded with an image that has their application and server. The cost of the software and support license is separate. It's co-located at our facility and leased for however long we maintain a software license (indefinitely). The total cost of the appliance is paid in installments over several years. They bundle for free all the required software and dependencies, though a lot of it is open source.
The vendor is small to mid-sized (not an Oracle or SAP but also not tiny) and a leader in their niche market.
As part of the price, they also provide:
- a warranty against defects, failure, damage, and theft unless caused by us
- on-call or office hardware support 24/7
- all maintenance, troubleshooting, etc as the device is considered a black box to us
Example, if Dell sells the server for $1,000, is a 15x markup reasonable (vendors leases it for $15,000)? If it matters in this example, assume the total amount paid to the vendor for the project, including appliances/software/support, is $1.0 million.