Used Licenses: A Cost-Saving Opportunity for Businesses

Despite an increase in IT budgets in 2019, global spending is expected to drop by 2.7% this year due to the pandemic[1]. Other firms are even more pessimistic, estimating an 8% decrease in IT budgets[2]. The health crisis related to Covid-19 is indeed pushing companies, especially CIOs, to cut their budgets and save money. In 2021, most spending will focus more on material investments, particularly in the cloud, rather than software. In this context, second-hand licenses represent a real cost-saving opportunity.

Non-compliance, mismatch with users' actual needs, maintenance overcharges, malfunctions, too many licenses purchased... While software costs represent 35% of companies' IT budgets[3], the hidden costs associated with them can amount to several tens or even hundreds of thousands of euros each year. By rethinking their software purchasing model, CIOs can achieve significant savings without affecting their teams' performance.

 Buy at a Lower Cost

 Companies thus waste 25% of their software expenses on hidden costs[4]. A reality that affects almost all of them (93%). Indeed, "over-licensing" can represent up to 25% and 30% of the software budget[5]. However, to limit the impact of these unnecessary expenses, IT managers now have the option to legally resell their "software surplus" on online marketplaces. For the buyer, acquiring "second-hand" licenses allows for savings of 20% to 80% depending on the product and its version[6].

 Sell and Reinvest in Your Business

 But purchasing is not the only savings opportunity in the second-hand market. Indeed, the buyer can also sell their over-licensed software. With the money recovered, they can either offset financial losses related to underutilization of their software internally or reinvest it in new hardware or software without increasing the allocated budget.

 This way, they place their software assets at the center of a virtuous circle for the entire company. The seller also benefits from a number of guarantees such as anonymity throughout the transaction process, secure payment before the delivery of licenses, and specific insurance for sales processes.

 A Legal Software Exchange

 For executives, buying and selling software also helps avoid hidden costs related to potential non-compliance of the solution. The second-hand license market is indeed authorized and strictly regulated by the Court of Justice of the European Union (CJEU) since 2012. The secondary software market is governed, like all markets, by the principle of supply and demand. To assess the book value and set the right price, there are software license references to refer to.

 Similarly, the resale of software entails a transfer of the right to use attached to the previously acquired copy and the associated license agreement. By going through an official marketplace, the buyer is guaranteed that the offered product is a legitimate and up-to-date license, and can conduct the transaction safely.

 Every transaction is subject to a one-time and fixed commission of 15% which the seller can anticipate and integrate into their sale price. For the company's administrative and financial management, it's also the possibility to anticipate these costs and have a clear view of upcoming expenses.

[1] According to IDC forecasts, April 2020 – https://www.idc.com/getdoc.jsp?containerId=prUS46186120

[2] According to Gartner estimates, May 2020 – https://www.gartner.com/en/newsroom/press-releases/2020-05-13-gartner-says-global-it-spending-to-decline-8-percent-in-2020-due-to-impact-of-covid19

[3] According to a Forrester study, 2014 – https://www.cigref.fr/wp/wp-content/uploads/2014/12/CIGREF-Marche-secondaire-logiciels-Softcorner.pdf

[4] According to a Flexera Software report, November 2016 – https://www.decideo.fr/Le-cout-invisible-des-logiciels-d-entreprise_a8906.html

[5] According to Cigref, 2014 – https://www.cigref.fr/wp/wp-content/uploads/2014/12/CIGREF-Marche-secondaire-logiciels-Softcorner.pdf

[6] Interview with Habibou M’Baye, co-founder of SoftCorner, Le Parisien, January 2017 – https://www.leparisien.fr/economie/business/et-si-vous-achetiez-des-logiciels-d-occasion-23-01-2017-6605568.php