Secondary Software Market Guide
Are you pursuing a Cloud First strategy? Or do you want to avoid the move to subscription-based software licensing for cost or deployment reasons? Secondary (or secondhand) software sales have been legal in the EU since 2012 as a result of ruling C128/11. You as a licensee can sell redundant software licenses – for example your Microsoft Office licenses freed up by a move to Office 365. Or you can buy used licenses to meet your deployment requirements, such as retaining beneficial per server or per processor metrics. The process for doing so is complex and not without risk, and for this reason the Secondary Software Market exists. The following guide describes the market, lists a number of vendors, and provides recommendations for prospective buyers and sellers.
Market Definition & Analysis
The secondary software market exists primarily as a broker between the original and future licensee. Vendors buy unused or unwanted licenses for stock and sell them to new licensees. As an end-user organisation you can therefore work with a vendor on both sides of the transaction – selling your redundant licenses and buying new ones. The market is currently characterised by structural issues around demand, supply, complexity, and publisher mis-information.
Key Findings
Your Rights
Whilst it may be possible to sell and buy secondhand licenses in other jurisdictions this Market Guide is concerned with the legal and commercial landscape in the EU. Your rights in the EU can be summarised as follows:
- If the license was first sold in the EU and has solely been used in the EU it may be re-sold.
- Even if the license agreement explicitly prohibits resale this prohibition is invalid for licenses first purchased and solely used in the EU.
- OEM licenses cannot be resold, because they are tied to the machine they were sold with. However, they may be sold along with the hardware.
- Subscriptions, including partial terms, cannot be resold.
- The seller must uninstall the software and retain proof of this.
- The software package must be sold intact – for example, if you own a bundle such as Microsoft Office Professional Plus you can’t sell Access and keep using Word. Similarly, even if you are no longer using any of the products you are not permitted to sell Word to Company A and Excel to Company B.
- EU Consumer Law grants implicit rights to receive maintenance and security updates for second-hand software.
Broker Services
When selecting a broker give consideration to the following:
- Guarantees – some vendors may guarantee the transaction in the event of a compliance dispute during an audit or license review.
- Financial Stability – as with any new supplier relationship complete your usual vendor checks. Can the vendor handle the deal size?
- Stock availability – some vendors hold no or little stock, delaying deal completion timelines.
- Vendor coverage – some brokers only cover software from a small number of publishers. Some only deal with Microsoft licenses, for example.
- Partnership arrangements – check if the vendor is a reseller partner for the software publisher. This can help resolve any issues with the transaction.
Best Practice
Once a purchase has been made, it is recommended that you do the following:
- Confirm you can download installation media.
- Ensure that all license keys and download media are archived to your Definitive Software Library or similar repository.
- Retain copies of transaction information including license transfer forms. For many vendors, including Microsoft, this is your sole proof of ownership. Often vendor portals such as VLSC are not updated with new license counts.
Inclusion criteria
We have attempted to include vendors from across the spectrum of size, geography, and product capability. If you know of a broker or reseller not listed, please contact the author for inclusion in a future edition of the guide.
Vendors
Value Licensing
https://www.valuelicensing.com/
Value Licensing are UK-based and were established in 2009. They are a Microsoft Partner and specialise solely in the brokerage of Microsoft licenses.
Differentiator: UK-based
Discount Licensing
https://discount-licensing.com/en/home/#skipheader
Discount Licensing are UK-based and were established in 2004. They are a Microsoft Partner and Reseller and specialise solely in the brokerage of Microsoft licenses.
Differentiator: UK-based
License Partners
License Partners are Netherlands-based and specialise solely in the brokerage of Microsoft licenses. The website is Dutch-only. They were established in 2011.
UsedSoft
https://www.usedsoft.com/en/contact-us/
UsedSoft were responsible for obtaining the legal judgement on software resale in the EU. They are German-based with offices across the EU and in Asia. UsedSoft specialise in the brokerage of Microsoft licenses. Their website is available in German, English, French, and Italian. They were established in 2003.
Differentiator: Market pioneers, long established.
SusenSoftware
https://www.susensoftware.com/company/
SusenSoftware are German-based and have been operating since 2001. They specialise in the brokerage of Microsoft and SAP AG licenses. Their website is multi-lingual.
Differentiator: Supply of SAP AG licenses
Softcorner
Softcorner are French-based and provide a service & marketplace to match license sellers with buyers. The terms of sale are agreed between the parties with the transaction mediated by Softcorner in return for a commission. Potentially a wider range of software is made available on the marketplace through this approach. Transactions are guaranteed via insurance.
Differentiator: Pioneers in providing an online marketplace for license buyers and sellers.
Preo
Preo are German-based and specialise in brokerage of Adobe, Citrix, and Microsoft licenses. They indemnify license transactions up to €10m and make use of Blockchain to authenticate transfers and resolve disputes.
Differentiator: Blockchain-mediated transactions, financial guarantee
USC
USC are German-based and specialise in the brokerage of Microsoft licenses. They also offer SAM consultancy services including Audit Defence. They were established in 2004.
Differentiator: Range of software consultancy and audit defence services.
2ndSoft
2ndSoft are German-based and specialise in the brokerage of Microsoft, Adobe, and Autodesk licenses, along with a number of other developer and engineering tools. They also broker Apple software licenses. They have been operating since 1995.
Differentiator: Autodesk and Apple license availability
LizenzDirekt
LizenzDirekt are German-based and were founded in 2013. They specialise in the brokerage of Adobe, Autodesk, Microsoft & Oracle licenses. They also provide SAM consultancy services including Audit Defence via vendor-certified consultants. They are a Microsoft Partner, Reseller, Education Reseller, and CSP, and offer CHF5m (£3.85m) guarantee on transactions.
Differentiator: Guarantee, strong relationship with Microsoft
Relicense AG
Relicense AG are German-based and specialise in the brokerage of Microsoft licenses. They have offices across the EU and a multi-lingual website. Relicense carry license stock for immediate sale and provide transaction guarantees.
License4Sale
https://www.license4sale.nl/werkwijze/
License4Sale are Netherlands-based and specialise in the brokerage of Microsoft licenses. They also claim to be able to source licenses for Adobe, Autodesk, Oracle, and SAP.
BestBuyLicenses
https://www.bestbuylicenses.com/en
BestBuyLicenses are Netherlands-based and broker licenses from a wide variety of publishers including Microsoft, Oracle, SAP, IBM, and VMWare. Brokerage is via an online marketplace linking buyers and sellers, with BestBuyLicenses acting as an intermediary for the transaction. They also provide procurement support via a third-party.
Differentiator: Online Marketplace, only vendor in this list to specifically list IBM & VMWare licenses for sale.
Soft & Cloud
Soft & Cloud are German-based and specialise in the brokerage of Microsoft licenses. Their license transfer process has been independently verified by TÜV Informationstechnik GmbH and they also offer blockchain-backed license transaction authentication. They have been trading since 2014.
Differentiator: Blockchain-mediated transactions, process quality independently verified
LI-X
Li-X are German-based and operate an online marketplace for trading in Microsoft, Adobe, Autodesk, and Oracle licenses. They provide the option of blockchain-based license transaction authentication. They have been trading since 2014 and have offices across the EU.
Differentiator: Blockchain-mediated transactions
VendoSoft
VendoSoft are German-based and specialise in the brokerage of Microsoft & Adobe licenses. They are also a Microsoft Partner and Adobe Certified Reseller.
Capability Summary
The table below summarises the capabilities of the businesses listed in this Market Guide.
(click to expand)
Summary
Whilst many vendors have been working in this field for a number of years the market remains immature. There is still a degree of buyer caution prompted by fears around publisher response and audit-readiness of secondary market licenses. License supply is generally limited to major vendors and there may be a delay in sourcing specific licenses quickly. The license transfer process carries a certain amount of risk, as evidenced by some vendors offering insured transactions and beginning to leverage technology such as Blockchain. Certain vendors have created online marketplaces to attempt to bring buyers and sellers together which should help build the market – making it easy to sell licenses is just as important as making it easy to buy them. Hopefully this market guide, along with our other content relating to the market, will go some way to increasing the use of secondary market licenses.