Revenue is recognized on hardware sales and software licenses upon shipment of the product.
Revenue from hardware and software maintenance contracts is recognized monthly when the amounts become billable under the contract terms. Other service revenues are recognized upon completion of the services. The components of the cost for development of software primarily include salaries and employee benefits and are expensed as incurred. The amortization of capitalized software is allocated as a direct cost of licensing DRA software. The Company typically experiences greater gross margin on software licenses than on sales of hardware or services.