9 Nov 2022
Which constellations and points in time are particularly suitable for the use of second-hand software
The world is in upheaval - a global pandemic and its effects, the noticeable onset of climate change, the increasing struggle for vital resources or the unstoppable digitalisation of economic cycles are complex challenges with high conflict potential. The impact on our global economic system is immense. Many nationally and internationally operating companies are experiencing a fundamental change of era.
As a result, savings and efficiency measures in economic activities have or are being given even higher priority. But this is not possible everywhere without a loss of quality. The IT sector offers an exception here in the area of ongoing licence costs.
The best thing: compared to the latest licensing, used software licences open up savings potentials of up to 70 percent. And since software does not wear out compared to other consumer goods, there are no losses in application quality.
Additional effect: At the same time, personnel-intensive costs for IT support or training are usually reduced.
No wonder more and more IT managers are discovering the advantages of trading in used software licences and integrating them at least partially into their existing software asset management. In this blog post, you will find out in which circumstances and at which times it is particularly suitable to rely on used software.
Buying or selling used software licences - PREO customers use these constellations to their advantage
For companies, there are various constellations in which it makes sense to analyse the potentials through the purchase or sale of used software licences in more detail and to use the efficiency advantages in a targeted manner. In more than 15 years of market experience in trading with used software, the following constellations have proven to be particularly suitable for our customers to permanently reduce existing licence costs or to monetise idle software assets:
- Internal restructuring measures, such as merging or splitting larger company units or departments
- Strategic realignment of the company including the internal organisational structure
- Adjustment of business planning with effects on job and workplace requirements
- Development or opening of a new location
- Company acquisitions including integration into the existing company or group of companies
- Sale of a division
- Company mergers
- Impending insolvency or insolvency that can no longer be averted
PREO-Tip: Realise savings and generate revenue
Every development or change process within a company is basically an opportunity to review the existing software inventory including the respective licences and to use the resulting financial potential. Either through a noticeable reduction in licence costs or the generation of income through the sale of licences that are no longer needed. Our experience shows that even for medium-sized companies, financial volumes in the five- or six-figure range can quickly be achieved, as these reference examples underline.
Used software licences - check inventory in the fourth quarter
But even in day-to-day operations, there are always occasions to optimise the existing licence portfolio. The ideal time for a regular review is the last quarter of a business year, which is usually also the time for budget planning for the coming year. An ideal opportunity to relieve the budget by buying or selling used software licences. When taking a look at a company's licence inventory, answers to the following questions, among others, can help:
- Do we have all the licences we need for the different areas of work and would they pass a vendor audit?
- Do we have licences in our inventory for which external support has already expired or will expire in the next 12 months? Currently, these are for example: MS Office 2013, Exchange Server 2013 or Windows Server 2012/2012 R2
- Which licences need to be renewed and can they be replaced by buying used software licences?
- In which areas is there over-licensing that can be sold?
You are regularly confronted with one of these questions. However, you are still unsure whether the purchase or sale of used software licences pays off for your company and which legal requirements have to be fulfilled to profit from it in an audit-proof manner? Let's talk about it! The PREO licence experts will be happy to advise you personally on the use of used software in your existing software architecture.
Example of insolvency: Used software licences generate high proceeds
In the course of the insolvency proceedings of BenQ Mobile GmbH & Co. OHG, the insolvency administrator Dr Martin Prager commissioned the auction house Dechow for the classic realisation of the insolvency estate. In order to optimally realise the software inventory, additional expert knowledge was necessary. On behalf of the auction house Dechow, PREO worked out the licence situation in cooperation with BenQ Mobile within a short period of time. The exploitable contracts were identified, acquired by PREO and transferred to various new owners. The proceeds achieved in this way, in the mid-six-figure range, significantly increased the insolvency estate. In this client case, you will learn how PREO, in addition to the financial realisation of the used software licences, also took over the complete processing of the transfers in a 100 percent audit-proof manner, thus avoiding any work for the clients.
PLUTA Rechtsanwalts GmbH, where insolvency administrator Dr. Martin Prager works, is a law firm for handling international insolvencies of any size. PLUTA offers services in the fields of insolvency law, commercial law and tax consultancy. The company, with around 400 employees, is one of the TOP 10 German insolvency administrators.
Special constellation: conversion to a hybrid software architecture
When converting their software architecture, many companies decide against a pure cloud solution and prefer a hybrid model instead. A hybrid model is a customised software solution that combines cloud and on-premise software in a perfect fit. The advantage: costs are saved every year without having to forego the central productivity advantages of the cloud. Do you also have such considerations for your company or are you in a current decision-making process? Then the answers to the following questions will certainly help you:
- How many employees/clients are permanently tied to the office?
- Where are on-premise licences completely sufficient?
- Which key features can also be provided via on-premise?
- How much budget can be saved annually with a hybrid solution that includes used software licences?
Whatever your final decision, here too our experience shows: With a hybrid model that cleverly combines a cloud solution with on-premise software, high savings in the five- to six-figure range can be realised compared to a total cloud solution, depending on the project and company size, as these examples prove.