Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Huge enterprise customer wants to see our source code

news.ycombinator.com

Post reply on HN
Print view View original

31–40 of 293 posts

Re: Ask HN: Huge enterprise customer wants to see our source code

#31

Post by TAForObvReasons »

dkural wrote: post #10

I ran a SAAS company for 8 years, going from zero to double-digit million rev per year. The answer is a clear no. They can PAY YOU to make custom plots/charts/reporting or run queries if they want to understand what it does better. There is almost always a way to achieve any business goal without requiring source code. The only case I can think of source code needing formal verification by a third party is if you're…

Have you actually dealt with enterprise sales? Source code is a fairly typical request, and there are software escrow and audit companies specifically set up to address concerns.

Microsoft, for example, gives source code access to paying enterprises and governments under the Shared Source Initiative specifically for security vetting and other auditing purposes.

OP: Consult a lawyer who specializes in these matters.

Re: Ask HN: Huge enterprise customer wants to see our source code

#32

Post by cat199 »

dkural wrote: post #10

I ran a SAAS company for 8 years, going from zero to double-digit million rev per year. The answer is a clear no. They can PAY YOU to make custom plots/charts/reporting or run queries if they want to understand what it does better. There is almost always a way to achieve any business goal without requiring source code. The only case I can think of source code needing formal verification by a third party is if you're…

> targeting drones to kill people or government jailing people. That doesn't sound like a commercial company in any event.

https://www.lockheedmartin.com/us/what-we-do/aerospace-defen...

http://www.corecivic.com/

Re: Ask HN: Huge enterprise customer wants to see our source code

#33

Post by threeseed »

Most of the people in this thread clearly don't understand the situation as Analytics/ML is quite different to normal IT.

1) The company is not going to acquire you nor will they sue you.

2) They absolutely want to replicate what you've done. It's not so that they can build their own startup and compete with you. It's because they genuinely want to understand how you got the results. Companies are increasingly basing their decisions on ML models and it's not acceptable for them to just "trust your black box". Especially since your model could be based off a misunderstanding of the data.

3) If you decide to say no then chances are they will walk away. Especially in the ML space companies are not going to let their core intellectual property be locked away in someone else's vault. They will simply not work with you.

4) The best way to handle this is simply to get them to sign a NDA or something equivalent that protects you in the case that a rogue employee decides to build a startup him/herself.

I am someone who works in ML for an enterprise company. For god sake give them the code and be grateful they are even doing a PoC with you.

Re: Ask HN: Huge enterprise customer wants to see our source code

#34

Post by pcl »

pge wrote: post #29
pcl wrote: post #20

Are you rolling out your product as a SaaS offering, or is this something you're planning to license to people to run on-premises? If the latter, I expect that you'll get lots of requests for source, either for inspection or for escrow. Personally, I wouldn't be scared of BigCo ripping you off. For the most part, large companies care a lot about staying on the right side of their contracts, and also it's generally re…

Can you elaborate a little on this? The reason I ask is that my experience has been different. I have seen a lot of requests for code escrow (source is released to big company if and only if small company goes out of business) when a large company was dependent on a third-party product, but I have almost never seen a request to review source code (the one exception being selling into classified government environment…

I wouldn't say it's been the norm in my experience, but I've definitely been on the receiving end of requests for source (both when working at a large enterprise and at a startup). In my experience, this is much more common when selling something that will run on-prem or in process, however.

Re: Ask HN: Huge enterprise customer wants to see our source code

#35

Post by bluetwo »

bluetwo wrote: post #30

Gut answer is No. Honestly, they are no experts, or they wouldn't need you, so them reading and interpreting your code is a patently ridiculous request. However, there is a huge opportunity here, based on the fact this is new ground for you and them. If they are truly worrying about justifying later the decisions to be made, then you CAN agree to design a report based on whatever your engine is doing, that shows addd…

By the way, there is a saying in negotiating that you may want to repeat to yourself a couple times: "If you're not willing to say 'no', then you are not really negotiating."

Re: Ask HN: Huge enterprise customer wants to see our source code

#36

Post by aNoob7000 »

TAForObvReasons wrote: post #31
dkural wrote: post #10

I ran a SAAS company for 8 years, going from zero to double-digit million rev per year. The answer is a clear no. They can PAY YOU to make custom plots/charts/reporting or run queries if they want to understand what it does better. There is almost always a way to achieve any business goal without requiring source code. The only case I can think of source code needing formal verification by a third party is if you're…

Have you actually dealt with enterprise sales? Source code is a fairly typical request, and there are software escrow and audit companies specifically set up to address concerns. Microsoft, for example, gives source code access to paying enterprises and governments under the Shared Source Initiative specifically for security vetting and other auditing purposes. OP: Consult a lawyer who specializes in these matters.

I've seen my company ask countless time for source code and your financials. If your financials are iffy, you might not even get past the RFP process.

Re: Ask HN: Huge enterprise customer wants to see our source code

#37

Post by threeseed »

njyx wrote: post #3

This is a complete no-no. There really is no justification for this whatsoever. What does "cover their bases" mean? As them to explain what they are trying to achieve and find other ways to assuage their concerns. The only legitimate thing is to have something in case you fail and they have "banked" on you. There is a legit way to solve that. basically if they want that tell them they should pay for an Escrow service…

I work for an enterprise company and we demand the source code for machine learning models from vendors all the time. This isn't like asking for the code to Excel. It's a model derived from our data that has likely no use for anyone but us and is highly susceptible to misunderstandings of the data. We absolutely need to verify your work.

Models are the output of the process. It's like going to graphic designer for work and them not giving you the PSD file. It's just not acceptable.

Re: Ask HN: Huge enterprise customer wants to see our source code

#38

Post by bluGill »

Ask them what their real needs are. Odds are they really want one of the two following. Protection in case you go out of business; Protection in case you have a legal violation (ie you use GPL code and they link to you - suddenly their code is GPL).

If it is the first, code escrow is very common. You should probably set this up as a gesture of goodwill even if they don't ask for it.

If it is the second, there are tools that you can run to ensure you don't (you should anyway - though the tools tend to be "enterprise software" and thus expensive for what they do). Once you are sure you are free from that type of them a lawyer can draw up legal indemnification documents.

If it is anything else, this is done - for an additional fee. 20 years ago a company sold us an OS, as I recall the price for source code was $100,000 on top of all other costs. My company refused to pay even though it would have saved far more money if we had been able to understand what the code was doing, and thus been able to integrate our code better.

I'm not sure what legal requirements were in place, but you should defiantly have a lawyer who knows this area of law create the agreement. Not just any lawyer, one with experience is worth paying for - find the lawyer first and pay him $200 to give a high end estimate of his costs to draw up the agreement - this is your minimum price for seeing the code. (which is to say you expect to make nothing after the lawyer is paid unless a second customer also wants source code)

Unlike most I wouldn't reject it. However it should be an additional expense, and it should be covered by some strong legal language.

Re: Ask HN: Huge enterprise customer wants to see our source code

#39

Post by notyourday »

wgj wrote: post #27
notyourday wrote: post #7

If they are trying not to end up in the situation where you go out of business and they are screwed, offer them to escrow the code for a certain amount of money. If you go out of business, they get the code. If you do not, they don't

If the out of business scenario includes the possibility of acquisition or asset sale, code escrow is a significant factor lessening the value of assets or killing the deal entirely. Stated differently, it's not what a buyer wants to find in due diligence. The $50+bn company might even be the potential buyer, but under code escrow they just get it for free (less whatever was negotiated up front.)

Rubbish.

Structure it as 1 year, 2 year, 10 year whatever the hell deal you want. If you are a $50BN company ( you aren't ) you simply fire that customer.

Re: Ask HN: Huge enterprise customer wants to see our source code

#40

Post by bluGill »

skmurphy wrote: post #21
notyourday wrote: post #7

If they are trying not to end up in the situation where you go out of business and they are screwed, offer them to escrow the code for a certain amount of money. If you go out of business, they get the code. If you do not, they don't

Even source code escrow should be resisted. "Out of Business" is not always clear and if you are trying to get acquired your value drops dramatically if major customers have your source.

True, the code escrow needs to be written correctly. Done correctly it only kicks in if the code goes unsupported. You can be acquired so long as the company buying you continues to support it at a "reasonable price". If they don't support the code for a "reasonable price" they didn't buy you for the code anyway so it won't matter. If they do support it, then the escrow doesn't come into play.
Post reply on HN