6 Feb 2024
Exploding licence costs, cloud risks and sustainability aspects
"The current rise in demand for pre-owned software reflects the growing need of companies to optimise costs and react flexibly to current market developments. Our customers see the integration of used software licences as a key to sustainable financial relief and to strengthening their IT infrastructure," says Boris Vöge, CEO of PREO Software AG. As one of the largest providers of pre-owned software licences in Europe, particularly for widely used standard software from Microsoft, PREO has been shaping the development of the market for over 18 years.
Since the resale of used software licences was declared legal by the rulings of the European Court of Justice (ECJ) and later also the German Federal Court of Justice (BGH) in 2012/2013, more and more companies, organisations and public administrations have been integrating used software licences into their IT infrastructure. IT landscapes have long since developed into complex hybrid structures in which those responsible mix on-premise and subscription models in the way that is most effective and cost-efficient for their individual needs. In the IT sector, clever purchasing and use of software licences can save millions.
This is also the reason why the plans of major software players such as Microsoft and Adobe to completely switch software licensing to cloud products and services are not working out for many IT managers and software asset managers. They appreciate the advantages of used on-premise solutions. This applies in particular to the purchase or sale of large volume licence packages, for example for application software such as Microsoft Office, operating systems such as Microsoft Windows or the various server licences for Windows servers, SQL servers or Exchange servers.
Various reasons for buying or selling used Microsoft licences
The reasons for rejecting a total cloud solution vary from company to company. However, from a large number of discussions with customers and potential interested parties, the following are the main reasons:
The demand for used Microsoft licences has increased noticeably since the Europe-wide price increase in spring 2023 for the tech giant's cloud products of around eleven percent on average. In addition, the cloud sprawl phenomenon is particularly prevalent in large companies with numerous locations and organisational units, as software is available and accessible at all times. On this basis, a cost dynamic can quickly develop that is difficult to calculate and harbours a considerable financial risk. Read more about this here.
Security risks with total cloud solutions
Whether ransomware, malware or attacks on availability, for example through DDoS attacks - the threat scenarios for cloud providers and their customers are huge. It is no coincidence that Microsoft has recently announced that it is investing tens of billions in the security of its cloud infrastructure. You can read more about this topic in this article.
Danger of excessive dependency
More and more companies are consistently trying to reduce one-sided dependencies on cloud providers, for example in the form of a vendor lock-in. Instead, the use of in-house on-prem solutions is becoming increasingly popular, especially where cloud services are not necessary or at least partially dispensable due to workplace requirements. Find out more in this article.
Sustainability aspects and reducing the corporate carbon footprint
The EU's new disclosure obligations, which will be extended to up to 50,000 companies across Europe from 2024 and will therefore also reach SMEs, are ensuring increasingly sustainable behaviour at all levels. This does not exclude the IT sector. Used software promotes an active circular economy and can therefore make a significant contribution to reducing a company's indirect CO2 emissions, especially when combined with extended hardware lifetimes. You can find more information on this in our article Green IT Solution.
Other reasons or country-specific characteristics also play a role. For example, some industries, such as public administration, energy supply or the healthcare sector, have particularly high requirements in terms of data sovereignty and data security as well as strict compliance guidelines. In France, for example, this means that hospital organisations are still not allowed to implement and use cloud software. In conjunction with the already high cost pressure in the healthcare sector, this is leading to increased interest in affordable used on-prem licences.
PREO tip: Cloud offerings are convenient but often less efficient
In a study published for Dell Technologies in 2020, the Enterprise Strategy Group analysed the extent to which moving workloads to the public cloud is worthwhile for companies. As a result, 54% of the more than 1,200 IT managers from Western Europe surveyed stated that such solutions cost more than on-premises operations. 58% stated that their public cloud solutions caused higher costs than they had expected.
Buying used Microsoft licences - what companies should look out for
Used software licences are therefore an effective and efficient way to sustainably reduce licence costs and thus gain financial leeway. Depending on the product and version, price advantages of up to 70 percent can be realised compared to the latest licence, which can lead to savings in the six-figure range even for medium-sized companies with a three-digit number of workstations. Our customer cases provide detailed practical examples of the purchase and sale of used Microsoft licences.
The PREO licensing experts generally recommend the following points when buying used software licences:
- The software was first licensed within the EU.
- The previous owners are known and the licence chain is legally compliant, fully and transparently documented.
- The provider offers you a legally compliant and audit-proof transfer process, with extended insurance cover if necessary.
- In addition to the audited licences, you also receive expert advice on all aspects of licence optimisation.
Sell Microsoft licences no longer required in full or in part
Companies should not simply write off unused or no longer required volume licences. It makes more economic sense to sell them to a reputable and experienced provider of used software with extensive legal expertise in the licence business. Our free downloadable checklist will help you choose a suitable provider. The income generated by the sale expands the existing IT budget and creates new scope for necessary investments. Another plus: the second or multiple utilisation of software products is an important contribution to an active circular economy and more sustainability in IT.
Extensive range of used volume licences from Microsoft
PREO offers companies, organisations and public administrations a large selection of used volume licences for current and older versions of standard software from market-leading manufacturers at all times. Used licences from Microsoft for operating systems, application software or servers are particularly in demand.
Whatever the need for used software, with PREO small and medium-sized companies as well as large companies have all the advantages on their side:
- High savings on ongoing licence costs of up to 70 percent compared to the respective new version.
- 100 per cent legally compliant and audit-proof licence acquisition with maximum transparency in all processing steps, including complete documentation in the PREO "Easy Compliance" licence portal.
- Many years of expertise in the integration of used software licences into classic network structures or hybrid licence models.
- Existing software licence management capacities for large IT infrastructure projects with thousands of workstations and cross-border locations.
- Active contribution to reducing the CO2 footprint in the IT sector by entering into a resource-conserving circular economy, including the extension of software and hardware cycles.
- Convincing reference projects for numerous well-known companies from a wide range of industries.