The ITAM Review

News, reviews and resources for worldwide ITAM, SAM and Licensing professionals.

Re-cycling hardware opens the door to re-cycling software

recylceIn a recent article on process of the month, we looked at a process to address the recycling of software licences on an IT estate, based on the assumption that the hardware was live, and was remaining with the company and also that the software was not being used in a 90 day period.

However, if we then move forward to the point where the hardware is to be disposed of, then it would be prudent to doff our caps in the direction of the software and make sure that we don’t unwittingly dispose of software that might be resident on devices.

As an upstanding IT professional, you might take it upon yourself to ensure that your hard drives are (as a minimum) low-level formatted prior to disposal; indeed you might be under legal or regulatory requirements to ensure that you oversee this work (and let’s not forget, everyone in the UK is bound over by the Data Protection Act).  But equally, you could be entrusting to a third party to purge your hard drives of all data and software and be happy with the WEEE disposal certificate that gets provided.

However, don’t forget that having received your WEEE disposal certificates, to ensure that your SAM suite can release those licences, you need to purge those disposed of machines from your inventory tool.

Inventory tools aren’t to know that you have disposed of a device; as far as they are concerned those disposed of devices are merely 30/60/90 days not on the network – and you need that degree of flexibility built into your inventory collection to accommodate laptops, mobile devices and those hard-to-reach non-networked devices that require manual inventory collection.

Do you remove your disposed of devices from your inventory tool?

In speaking with Phil Goldsmith of Scrumpymacs, a leading recycler of IT assets focusing on the Education Sector he encounters no end of organisations that don’t make this association within the hardware disposal process:

“Time and again, I keep hearing stories from colleges and universities on how IT budgets are constantly being squeezed but when I dig a little deeper, little or no effort is being made on accounting for software that might be on the kit we are taking away.”

But this is just half of the equation; having disposed of obsolete devices there’s a real chance that any software on those devices might also be obsolete.

So why not sell them on?

No, you haven’t entered an alternate universe – you are able to re-sell software licences, and (in part) we have Oracle to thank for this.  As it was their attempt to sue a licence trader in Germany that saw the judge rule in favour of the re-selling activity.  NB:  It was never illegal to do so in the first place, but software vendors don’t like the activity as it might undercut the first-time sales that they strive for. 

Discount-Licensing have been in this game for a while, and they will buy your licences from you (don’t be naïve enough to expect the retail price back for the software) and equally Corporate Licensing Exchange acts as a brokerage if you would like to go to market direct and see what deals can be made.

The re-sale value of the software depends upon the title, edition and age.  I have heard rumours of circa 30% of the RRP being re-covered; and here’s a shot in the arm for the public sector:  merely because you have bought licences within that sector, does not mean you can only re-sell those licences to that sector – so the percentages to be recovered could be even higher.

Aside from recovering residual value from assets that might previously have been viewed as CAPEX expenditure (and therefore a right off once made) this returns software to a true asset status i.e. software can (and should) be included as part of the tangible assets of the company which has the potential of adding millions to the value of large organisations, and should (at last) be given proper weight of attention in merger/de-merger activity (a primary driver for software vendor sponsored audits).

And a final benefit out of this emerging market practice…

Do you recall how software vendors might catch you out for compliance on legacy titles that are no longer sold and so force you to buy the newest release of software? Which of course was more expensive again?  Well you have two companies above who you can approach for legitimate licences of the older versions of software (at a discount) that won’t try and force support and maintenance on the sale.

Re-cycling never looked so sexy!

 Image Credit

About Rory Canavan

With a technical background in business and systems analysis, Rory has a wide range of first-hand experience advising numerous companies and organisations on the best practices and principles pertaining to software asset management.

This experience has been gained in both military and civil organisations, including the Royal Navy, Compaq, HP, the Federation Against Software Theft (FAST) and several software vendors

One Comment

  1. Matt Fisher says:

    More great insight, thanks Rory. You’re right about inventory tools having to be managed closely to identify when assets have been retired or disposed, as this can be difficult to automate (for obvious reasons). What can be done though is that licenses can automatically be re-harvested after disposal or a certain period of inactivity. Having a tool with the ability to define and implement that policy is beneficial. Then, as you say, you can decide the best way to use the reclaimed licenses!

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