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I have been doing webdesign for a small business in Denmark, which alrady have a deal with a larger company to create the final site.

Among this companys proposal, I see that they charge a rather large fee for installing Magento on my clients server, and an additional fee to integrate the design.

Same company forbids my client from having FTP or similar access to the server, and they are therefornot able to install this themselves.

My question is : is resale of the Magento really allowed by the licence? This company wants to charge a rather steep amout for even installing a blank version of it, no Magento-licencing included.

Ihave looked larger company up, and this company does NOT have a standing licence for Magento. And even if they got one, I have a sneeky feeling that something is legal/licence wrong here.

The reason I share this with you is that I have a guts feeling that I should raise some critical questions and suggest that My client uses another company for their webaite, but I need to be certain that Im on the right side.

The IT company has no partnership with Magento/Varien, and have a somewhat tarnished reputation already...

I have mailed Magento about this, but have not had any response yet.

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A company can charge whatever they want to install software, regardless of the software licence. They are selling a service, not a product. I could charge $20,000 to install WordPress, for example,without violating the software licence (although I never would, because it's both immoral and exploitative).

Note also that Magento Community Edition is released under the Open Software Licence, which allows it to be resold, so - in this case - they're perfectly within their rights to charge for the product too if they so wish .

If your client is being charged a crazy fee for the product, you might point out that they can download it free of charge. And if the installation cost seems unfairly high, it would not be a bad thing to explain that they might be overpaying for the service.

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Thank you, this was sort of what I was expecting, but needed to make sure. They are charging roughly 8.000 usd for a clean magento install, plus 400usd a month as Ubuntu fees... – Nils Munch Jul 11 '11 at 6:14
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@Nils That sounds like a lot if a clean install of free software is all that they're doing. Do consider, though, that large IT consultancies will generally charge a lot more for basic tasks than small companies simply because their overheads are higher, the companies they work with don't understand the work involved, and big businesses can often afford to pay more. It sounds crazy, but if the job's gone out to tender, the $8k might even be their cheapest offer. Unfortunately, this sort of thing isn't uncommon in the corporate world, although you're right to question it (and save them money). – Nick Jul 11 '11 at 8:16

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