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Three-year’s cooperation with Merkeleon company turned out to the complete disappointment

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Сотрудничество с компанией SOFTSWISS/MERKELEON

«Personal experience in product development of e-Commerce».

I’m waiting for your stories about how you, personally, or with the help of IT companies, develop your e-Commerce products. Accepted both positive and negative experiences on the development of the auctions and Internet shops. Also I’m interested in experience of creating electronic boards and any other business relating to the earnings in the Internet. Write whatever you like, post whatever you like.
And today I present a story based on personal experience of one of the Internet entrepreneurs, who ordered the development of its trading platform from a company specializing in the development of this kind of products.

Artem A.: Felix, please tell me how it all began. How did you come to thoughts about your Internet business? Why a trading platform, and how you chose the developer from all the available IT companies?
Felix M.: Starting from 2012 I got the idea to make my own electronic trading platform with the best possible tools for sellers. It had to include different types of auctions and tenders, as well as the functionality of an ordinary online store. In general, in the end it was meant to be a place where everyone had an opportunity to try himself as the owner of the “auction house”. I began to study the question and faced with the fact that finished product with such functionality simply does not exist. And I had to do everything from the very beginning.

By that time, I found, that further in this issue has moved the Belarusian company SOFTSWISS. Now they are engaged in the gambling business. They delegated to Merkeleon company their auctions. During the correspondence, I realized that they don’t have what I need but they can all quickly create it. Some time I spent in remote meetings, as was spending «winter» in Thailand. When I returned to Russia I immediately came to Minsk to sign the agreement for the development.
I met with the company leader Ivan M., with developers, designer, and now with the Account Manager Alexandra V. With the Chairman of the Auctions Department Alex S. I met through a correspondence much later.

Artem A.: Felix, please tell us about the beginning of cooperation, the stages of the project. Why you won’t advise to use the services of this IT company to the beginners? How it all began? And then how it all ended with a 3-years development of your software product in cooperation with the Belarusian IT company Merkeleon, registered in Austria.

Felix M.: My cooperation with Merkeleon started on 18.12.2012 with the response to my request by the Account Manager Alexandra.

Hello, Felix
Thanks for the request and appreciation of our product.
My contacts are in signature; we can call you in any convenient time. I’d be happy to answer your questions.
Waiting for Your reply.image

I must say that the slogan “Your dedicated IT partner” on the SOFTSWISS logo incite you on cooperation (incidentally, this slogan is not there anymore. Maybe I looked bad for it, or maybe this has some another meaning), moreover, account managers in the company are quite friendly and helpful. They will always wish you “a good day” and shout that “we’ve good news for you!”, when something quite trivial going on with your project. Outwardly, everything was really good, and I wanted to give a high evaluation of their product (I wrote about it in my first appeal). As time has shown, good-natured attitude of management, modern website design developer, was only the outer shell, very different from the internal content of the company.

Сотрудничество с компанией SOFTSWISS/MERKELEON
According to the information available online, IT company Merkeleon / SOFTSWISS Belarusian origin from Austria, providing IT software solutions. Legally they are different companies but in fact they are controlled by a single global Director Ivan M. Distinguishing feature from other companies developing their products, it’s not selling ready-made boxes in the property to a new owner with the ability to support and further develop it. The provide modules for use on closed code with technical support. The key words here are proprietary code and tech support. To these two concepts (they «trap» for aspiring Internet entrepreneurs), I have dedicated a separate article. “Proprietary code” and “Experienced team of Merkeleon technical support”.

But first, we received “Happy New Year” and “Merry Christmas” congratulations and other politeness, which, of course, forced me to make the final decision. If I could’ve rewind time, I’d never ever do it.
No, I certainly understood that in the IT industry, you may come across some people, wishing to assign your ideas to themselves and this case can be no exception and therefore requested NDA.
And on 10.01.2013, in 20:29 Account Manager Alexandra V. sent it to mt with the following words:

«Hello, Felix
I’m sending to you an NDA. Please review and add information about your company as an individual, or specify legal, if already issued. You can also amend the content of the Agreement if you’d like.
If You have any questions, we will discuss them over Skype.»

Immediately here I’d like to attract reader’s attention (!) never discuss over Skype (only by e-mail) any important issues. Because when a controversial situation, which will definitely be not alone, if you suddenly will decide to work with this company, no Skype talks, even written, are not taken into account.

Then began the negotiations necessary for E-marketplace functionality and mapping them with the capabilities of existing auction platform Merkeleon at the time. In the end, we got the first Technical Task and proceeded to the comments and additions. It was about the use of QR codes in pages and lots of shops, about positioning on the map of shops. About products, and more, is that the platform was not but the main explanation of what is selected in the auction calculator modules might work as a marketplace. Here sellers of goods and services are all interested, and the administrator is not a seller. Here is a quote from the text of the initial discussion on Technical Task:

Merkeleon: “On the very beginning it will be autonomous auctions and admin will be able so search for each product the separate auction».
Felix M.: «Not the admin but the user (owner of the goods) decides on which auction to put the product or service. ETP during the choice of the auction explains in detail all the risks and benefits!!! It’s important! Otherwise, the user in case of unsuccessful sale will feel cheated and never would participate in it».

I understood, what we are doing, and what not, and on January 15th, 2013 signed a new agreement with Ivan M., according to which:
«The parties acknowledge that the execution of this agreement may lead to the development of new private and secret concepts, methods, technical devices, processes and ideas. The parties agree that they belong exclusively to the customer without regard to their origin, and that the developer will not, except as acting in the framework of the execution of this agreement and only with the written expression of the will of the customer free from unreasonable withheld, sell, use or disclose the above-mentioned private and secret concepts, methods, technical devices, processes and ideas (know-how) to any person, group of persons, company, or corporation, which competes with the customer or carries out such activities».
Honestly, this agreement gave us confidence that everything, what will be implemented for our project, won’t appear with the products of other clients, who cooperate with “Merkeleon” company.
However, I was wrong but I’ll tell about this in the article «Everything, that you develop for yourself, may be assigned by the developer».
Further we proceeded to the active phase of programming. We faced with the fact that the technical task and any subsequent tasks for improvements of this company must be so described so detailed, that I decided to dedicate to it a separate article. And called it« Competence IT consulting from the company Merkeleon».
So this way we worked for 3 years. Many issues argued for months and it’s constantly shifting the launch date of the project. Finally, we started and opened the access to the site. Started to get feedback from users and to generate new jobs for the existing wretched functionality. It took more and more time and money. Each new job created no conceivable amount of bugs. Finally, the understanding with the developer disappeared completely. I understood that it only gets worse, and on February 1st, 2016 I informed Ivan M. that I’m planning to close the project, due to the inability to pay for further tech support. The budget, spent on fighting with never-ending bugs caused by the implementation of a new and old (previously completed) tasks. In other words, I had no desire to pay for a second time. Also I explained that we want to get the source code of the project to our server. Ivan M. as usual did not agree with the bugs and took time to reflect on that proposal.
A week later he agreed and after three more days “Head of auctions Alexey S.” sent an additional agreement. It it’s text it became clear, that intellectual property rights on software product belong to the developer. But what about our previously signed documents, according to which all our innovational products belong to us? On what I received an answer. Here are quotes from correspondence:

Felix M.: «Ivan, Alexei sent us a supplementary agreement. On its component, it’s contrary to all our previously signed agreements with you. The logic follows that we take our product in the basic configuration and for the transfer to our server pay you €5400. It’s not taken into account our three years of development and wasted money. Moreover, no one, for nothing is not responsible. But everything is our responsibility. This won’t work for us at all».

Ivan M.: Quoting “We’ve, as I see different points of view on this issue. You can’t understand that it’s not your product that is no longer the project that was done in the origin. It has a lot of changes, improvements etc., and this is a project based on our software Merkeleon”.

I mean, he basically admits that the product Merkeleon has a lot of changes and improvements but does not agree with the fact that all of these changes appeared due solely to our project. This of course is not acceptable in the business world.

Artem A.: So, the developer decided to leave you without intellectual property developed for you? And how you figured out this situation?

Felix M.: The agreement about the program code transfer to our server, we pointed out that the intellectual property rights are transferred also. Software product developed in accordance with the contract. During the 3-year activities, we signed a couple of agreements which are an integral part of this agreement, which determined the order not use our ideas. That’s all.

Artem A.: So, if a developer will use your ideas, that will violate your intellectual property rights?

Felix M.: In general, yes.

Artem A.: Please tell me how a developer can so brazenly dictate the terms, and which scheme of relationships do they have with clients?

Felix M.: It all starts when a potential client justifies the fact that “to have its own staff of programmers is too expensive and not profitable. And he sould be focused on business processes”. And development on closed code, only adds to the stability and security to his/her software product. Isn’t it sounds convincing? In real, for this imaginary convenience you have to pay quite a serious price.

I will show you what does it really mean to work with SOFTSWISS / Merkeleon. I’ll show you the scheme in the full sequence from my name. Anyone may apply it to himself:
1) We make the calculation list of what I’d like to see in the final software product, including «Individual design for €2499»
2) We sign NDA, the developer invoiced the contract for the design, technical specification, license agreement and schedule of payments
3) The work on the project is getting started. Coming closer to the end we understand that many things work not as planned. And what works, has quite a conceivable amount of bugs. On the subject there is a separate article » Bugs in the individual modules and the software product as a whole, which will realize the experienced team of the “Merkeleon” company.
4) sign with developer another agreement on securing our intellectual property rights in the final product
5) hire specialists, order audit of usability and SEO. Conduct other activities contributing to improve our product and separate it from the others.
6) make many large and small improvements according to the wishes of customers. Everything is done so slowly that half of the customers lose patience and leaves the auction. On this subject I will write a separate article SOON. I named it accordingly «Speed performance by Merkeleon». Moreover, the developer periodically offers to perform the work on the model, which I’ll describe in this article «Work on the model Time&Material and ODT». at the same time, since the release of the open access to the project, you pay the maximum rate of support, the details of which are described in the article «Rate for technical support – 899; maximum but maybe not final»
7) when ready, despite the fact that lots of things periodically disconnects (the description of these processes is in the article » Disabling the operating functionality or logic of Merkeleon«), others work not correct. One of the examples SOON will be described in the article “Created an adapted website, not adapted for mobile devices». Separate items not implemented at all, we are announcing the desire of obtaining product on our server.
8) we got a check in which the amount known only to the developer. It’s based on his wishes and of course in no way specified in advance. ‘cos we were convinced that working on closed code is what we actually need
9) we agree to pay after the audit code for the presence of fatal errors, ‘cos we know about constant bugs. It is more than urgent, moreover, we’ve some problems with paragraph from the proposed developer agreement, which is literally written: «the Software is provided «as it is». The contractor makes no warranty as to its use or performance»
10) they refuse to make an audit of the code and insist that the access to the code will be granted only after full payment
11) we agree, and request a transfer agreement of the source code for the developed software product
12) we got the agreement, in which it’s not fixed our intellectual property rights and literally says the following: « The customer agrees that the software platform “Merkeleon” based on the software of the Customer and the provided documentation, are the intellectual property of the Contractor. This License agreement grants Customer no rights to use intellectual property»(!). And we, as the Customer, in turn, only entitled to use it. Quoting: «This Agreement gives to Customer the right to use the software «Online auction» within one website that operates under one domain name». Also it says that you are not allowed to sell, lease and generally do something, what you want to do as the owner of the intellectual property rights of the software product.
13) we could’ve accept the terms of developer and give him intellectual rights to a unique software product but we rectified the situation with our lawyers and brought everything back
14) then there was launch a long process of handing over the product to our servers. We found incorrect server setup (what is this? Unprofessional work or undesired existence of our project without their technical support?), and a whole series of errors in the interaction of modules. (more on it you’ll see SOON in the article «Closed code»).
15) bugs do not leave our project until now but the developer continues to correct them.
Still in the development stage, we’ve notified the management company that SaaS products must be constantly improved in terms of stability at their expense, and received a negative response, which will SOON be described in the article «SaaS or not SaaS?”
16) and finally, there comes a time when we closed the root access to our server and started a free fly. But how many projects have reached the final stage and are currently working, it’s free to check.

Artem A.: It turns out that first they go to any conditions and requirements of the client at observance of interests, and then play on the fact that the client only would not lose the millions invested in the project? That the client has to agree with all their terms and conditions? And if at the final stage of disagreement not be resolved, then the project will simply remain on the developer’s server forever?

Felix M.: Absolutely right. And I think that there are many such kinds of projects. Just not everyone is going to talk about it openly or to write the article. I think that there are those who just write off this bad experience on expenses and have closed this topic. Entrepreneurs do not like to advertise not a good story. However, I am sure that if among the readers there will be those who «worked» with this company. In this case, I’d ask them to tell us about it in the comments to this article. I believe that this will help to protect someone from imminent expenses and unrealistic expectations. Exactly that’s why I wrote this article.

Artem A.: Thank you for sharing your experience but I’d like to ask how things are going now?

Felix M.: We’re all right. We’ve accelerated work on the project as soon as redeemed the code and it was moved to our server. And that would get in the open access re-had to completely redo a crumbling «rubber» design. To redo the cabinets. To change the logic of many processes. A lot of optimization in the code, because as the programmers, part of it consisted of «the Hindu code» and the heap of crutches. As well as implemented a large number of tasks that have dragged on since 2012. In general, we’re almost ready for the big update and I think it’ll have positively affect our clients.
Artem A.: Thank you for the interview Felix, and I wish you good luck.

Dear readers!
In the comments to the article please share similar experiences in developing our software products and if your story will be objective and useful to readers, I will interview you and write about this in new article in the section.
Just want to warn everyone that sharply negative comments will be deleted.

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