Despite a rise in IT budgets in 2019, global spending this year is expected to fall by 2.7 % due to the pandemic[1]. Other firms are even more pessimistic, estimating a drop of 8 % in IT budgets[2]. The health crisis linked to Covid-19 is pushing companies, and CIOs in particular, to review their budgets and make savings. By 2021, most spending will be focused on hardware investments, particularly in the cloud, rather than software. In this context, second-hand licences represent a real opportunity for savings.
Non-compliance, inadequacy with users' real needs, additional maintenance costs, malfunctions, too many licenses purchased... If the cost of software represents 35 % of a company's IT budget[3], the hidden costs associated with it can amount to several tens or even hundreds of thousands of euros each year. By rethinking their software purchasing model, CIOs can make significant savings without affecting the performance of their teams.
Buy for less
Companies waste 25 % of their software spending on hidden costs[4]. 4] This is a reality that affects almost all of them (93 %). In fact, over-licensing can account for as much as 25 % and 30 % of the software budget[5]. However, to limit the impact of this unnecessary spending, IT managers now have the option of reselling their "software surplus" legally, on online marketplaces. For the buyer, this acquisition of "second hand" licenses can save between 20 and 80 % depending on the product and its version[6].
Sell and reinvest in your business
But buying is not the only opportunity for savings on the second-hand market. In fact, the purchaser can, in parallel, sell his software in overlicensing. With the money recovered, he can either compensate for the financial losses linked to the under-use of his software internally, or reinvest it in the purchase of new hardware or software without increasing the allocated budget.
In this way, it places its 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 upstream of the delivery of the licenses and insurance specific to the sales process.
A legal software exchange
For managers, buying and selling software also avoids hidden costs related to a possible non-compliance of the solution. The second-hand licensing market is indeed allowed 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 fair price, there are software license benchmarks to refer to.
In the same way, the resale of a software leads to a transfer of the right of use attached to the copy previously acquired as well as the transfer of the associated license agreement. By going through an official marketplace, the buyer has the guarantee that the product offered is an official and up-to-date license, and can make the transaction in complete security.
Each transaction is subject to a single, fixed commission of 15 % that the seller can anticipate and integrate into his selling price. For the administrative and financial management of the company, it is also the possibility to anticipate these costs and to have a precise view of its future 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 report by Flexera Software, 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
