IT Supply Chain

When sourcing IT, VARs and end users have a variety of hardware options (i.e. new, manufacturer certified refurbished and third party refurbished).  More recently, maintenance options (manufacturer, and third party) as well as software options (closed source, open source, SaaS, etc.) have gained greater prevalence and acceptance.

With all these changes and new choices when procuring IT, software licensing is still shrouded in confusing terms and legalese.  Often consultants, analysts and VARs are brought in to sort through the licensing complexities to ensure compliance and optimal terms.  Still end users are left feeling jerked around and at the mercy of software licensing arrangements.

One licensing option that has received limited attention over the last decade is second hand licensing.  Discount-Licensing.com pioneered the second hand licensing business model and continues to be an industry leader.  Currently second hand licensing is a tiered industry, where tier 1 competitors both purchase and distribute / recycle pre-owned licenses, tier 2 competitors resell second hand licensing from tier 1 sources and tier 3 are indirect competitors.   The key tier 1 players are primarily located in the UK and Germany and include: Discount-Licensing.com, Relicense, Susensoftware and Usedsoft.

Discount-Licensing.com offers some options for clients with Microsoft volume licensing agreements and SAP software licensing.  Their core service is assisting organizations unload unused Microsoft volume licensing agreements and SAP software licensing.  In addition, organizations that find themselves out of compliance can now purchase pre-owned licensing through Discount-Licensing.com.  Discount-Licensing.com handles all aspects of title transfer.

So why isn’t this more prevalent?  During tough economic times, where businesses are downsizing and tightly scrutinizing all expenditures, one would think that second hand licensing would be a perfect match.  Noel Unwin, Managing Director of Discount-Licensing.com, stated that industry awareness of second hand licensing options is lacking.  Moreover, once organizations gain awareness of second hand licensing options, then there is an initial trepidation and leeriness regarding legitimacy and legalities.  To appease client concerns Discount-Licensing.com forwards standard manufacturer documentation regarding resale of software licensing for client review.

What has allowed Discount-Licensing.com’s business model to work is their good working relationship with Microsoft as a Registered Microsoft Partner  and authorized Microsoft Reseller.  According to Noel, Microsoft is kept apprised of all licensing transactions.

Hopefully the efforts of the second hand licensing industry will pave the way for less licensing mystique and greater client options.