The emerging trade in second-hand Microsoft =
licences
![3D"The](3D"http://www.ovum.com/go/content/images/0346991.GIF")
David Mitchell, Software Practice =
Leader
Last week saw the beginning of trade in =
second-hand=20
licences for Microsoft software, by =
discount-licensing.com.=20
The licences that it provides are acquired from =
companies that=20
have become insolvent or that are downsizing. The cost =
of the=20
licences is quoted as typically 20-50% below the price =
provided by existing Microsoft retailers.
This ruling opens up a whole set of potential =
issues but we=20
will highlight two of them.
Firstly, there is a positive side. It recognises =
that=20
software is an asset that organisations should value =
and=20
manage in the same way as they manage other major =
asset=20
classes. Until now, many organisations did not have a =
mature=20
way to manage their software assets, and this led many =
to=20
become non-compliant with their licensing terms. =
Hardware has=20
always been treated as an asset and managed =
accordingly, with=20
derivative markets around financing and asset-recovery =
services emerging in recent times. This is an early =
sign that=20
software is beginning to follow the same trend.
Secondly, this is likely to cause an element of =
price=20
disruption in the Microsoft economy. There are already =
signs=20
that some Microsoft resellers are uncomfortable with =
the=20
offering from discount-licensing.com. However, we see =
the=20
potential for a new set of market opportunities around =
second-hand software. Ambitious resellers are likely =
to see=20
the potential and find strategies to address the same =
market=20
space. It can be difficult to generate technical =
innovation=20
without the R&D budgets of the major corporations, =
but=20
commercial innovation is equally valuable - and should =
be=20
encouraged.
This is a further validation of the move towards =
licensing=20
and pricing research that Ovum began five months =
ago.
David Mitchell is the Software Practice =
Leader,=20
managing the Software@Ovum advisory services. He also =
leads=20
the consulting group that focuses on the software and =
IT=20
services=20
market.
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