Need advice on shutting down a commercial software project.

November 8, 2011 10:47 AM

I've reached a point where I don't have the desire to continue developing my commercial software product.  I need some help on deciding what to do with it.

It's supported me for the last 7 years, and I have had many thousands of customers. I suspect that less than 10% of the user base still uses the application though, and annual sales are currently 25% of what they once were. 

My first instinct was to open source the entire project, announce that it was ending, and stop taking sales orders.  However, the application depends on multiple commercial libraries which I've licensed over the years. Three of those libraries have been abandoned without the copyright owners providing contact info, and two of the components are still being sold and can not be open sourced.  Those five components are critical to the application, and there aren't open source equivalents.

With the added complication of the commercial libraries, I'm leaning on just ending the project and discontinuing support after myapp's terms end (basically I agreed to provide email and forum support for 1 year after purchase). 

So my thinking is that I can announce the application will be discontinued at a certain date, stop taking sales on that date, then continue to support it for a year, then close shop.

My customers run the gamut from individuals to large corporations, and in some cases I know it's part of an established corporate workflow. I want to help my existing customers, but I can't imagine this thing going on forever.

Any ideas? Have you been in this situation before?  What was your expectation as either a customer or a developer?

FWIW, there are applications that do something similar, though not exactly. I cater to a particular industry, and this industry is somewhat ignored by the big players.  The application is in the $50-75 range. Why do I want to quit? I really want to do something else with my life now. I've worked 80 hour weeks for years and I've saved enough to take some serious time off. I'd like to wake up and not look at a computer screen. I'd also like to do this in an upstanding way. Throwaway email: [e-mail]

posted by anonymous to computers & internet (10 answers total)

Have you considered selling the whole thing to someone who would like to continue support and development?
posted by DarlingBri at 10:51 AM on November 8, 2011 [1 favorite]

I agree with DarlingBri, my first instinct would be to try and sell it.
posted by shino-boy at 11:08 AM on November 8, 2011 [1 favorite]

Or, have you considered outsourcing the support and development to someone else while you retain ownership?
posted by carmicha at 11:10 AM on November 8, 2011 [2 favorites]

I know about a guy in home video with a similar pickle. My advice to you is the same advice I'd give to him: sell the source code to one of your largest customers, someone with the resources to decide whether to continue developing the application as a revenue stream or leveraging it as a competitive advantage.
posted by infinitewindow at 11:22 AM on November 8, 2011 [1 favorite]

Yep - sell it to somebody. Approach competitors, if any exist. If not, talk to one of our Fortune 500 type clients and see if they are interested in buying the code. The danger in talking to competitors is that they run to your biggest customers and tank your business before you are ready. But maybe that isn't really a problem in this situation.
posted by COD at 11:36 AM on November 8, 2011 [1 favorite]

I'm guessing that the costs of finding a buyer and executing the sale would be disproportionate to anything you might expect to receive as a price ?

I say this because I assume if it was as easy as "find a buyer" you wouldn't actually be asking the question ?

If that's so I think your 'stop taking orders, fulfill remaining support obligations' approach is perfectly reasonable.

I also think a form of open-source would be a generous thing to do on your part although as you outline because of the difficulties with needed components really only of any use to existing customers who (presumably) already have the rights to use those components via their license from you ?
posted by southof40 at 1:05 PM on November 8, 2011

The company I work for faced something like this... we had an application that sold for years, but after a few years we were down to a tiny fraction of users with no new sales. The writing was on the wall, and our staff was eager to move on to other things -- but we were reluctant to just shut down and leave our user base hanging. So, over the next few years, we tried everything we could think of: nobody wanted to buy it, attempts to spin it into something new and different went nowhere, nobody in the community was willing/able to pick it up, etc. We eventually arrived at a place where we stopped making any new major revisions to the product, but still offered support to existing users.

None of these things re-invigorated the application or restored it to profitability, and they didn't even help much -- we just got increasing support requests, of increasing severity. It rapidly became enough of a logistical nightmare that we finally gave in and announced the product was ceasing support and development altogether (on a day set just enough in the future to meet all obligations we'd made). And even though that was 3-4 years ago, we still get contacted by old users hoping for new sales or versions now and then.

It may well have been better for everyone if we'd just ended it when we knew it was over. I don't think we'd have felt right about it unless we'd tried everything reasonable, though. Good luck!
posted by Pufferish at 1:51 PM on November 8, 2011 [1 favorite]

If you do decide to shut it down, put up an announcement a year in advance of discontinuing support, and recommend alternatives for your customers. Offer to do paid consulting on switching to an alternative solution.
posted by miyabo at 2:01 PM on November 8, 2011 [1 favorite]

if you have existing large customers where the app is part of their established workflow, I'd approach one (the biggest?) and inform them that you're planning on discontinuing the product and offering to sell them all rights. if they say "no" then nothing lost, and if they say "yes" then you've at least made *some* extra cash.

regarding open-sourcing it, depending on the exact terms of the licenses you have for the external components, you may be able to go down that path. it'll never get any new users, since they won't be able to license the abandoned libraries, but at least the existing userbase can (if they want) do their own maintenance. this option depends on the external libraries being shipped as .dll files (assuming you're on Windows) rather than being statically linked into the executable, and on the rights that you're licensed to pass on to the end-users being broad enough to cover use of the libraries with a copy of the application that you didn't build.
posted by russm at 5:27 PM on November 8, 2011

My company started with a small initial product that was very cheap. After 5 years our other products had totally eclipsed it. At that point, we announced that we would donate all proceeds to a charity the CEO selected with no future support. Even though we will still field a support call now and again, we don't advertise the product or the support. The last version we cut was to fix a 64 bit issue, IIRC.

The reason why we field the support calls that come in is that one of our main differentiators from our competitors is that we have real tech support, so that's part of our corporate culture.

You can open-source it - it's just more work. You would have to isolate the functionality of the commercial libraries into adapter modules/classes and have a way for them to be dropped in.
posted by plinth at 3:33 AM on November 9, 2011