Whiteboard Wednesday Episode 25: What is the secondary software?
Welcome to Whiteboard Wednesday, this week, what is the secondary software market?
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As a consumer, I can buy a piece of hardware, I can use it, get some value from it, and then I can sell it on should I want to. I could stick it on eBay or sell it to a friend, whatever I want to do. I can also do that with a piece of copyrighted IP, like a book, I can buy a book, I can enjoy it, I can sell it on, stick it on eBay. And the little known fact is that you can actually do the same with software under certain conditions, you can buy some perpetual software, use it and get value from it and then sell it on. But there are certain terms.
First of all, you’re not allowed to sell OEM software. OEM software is that which comes with the device, such as sometimes you buy a laptop, and it has OEM operating system on it and that’s supposed to live and die with that device. Secondly, you can’t break up bundles. So if you bought a bundle of things, including this piece of software, it needs to stay as that bundle. Thirdly, it can’t be a subscription. It has to be a perpetual license. Fourthly, you need to have it installed and have sufficient processes in place to demonstrate that that’s installed. And fifth, it only applies in the European Union, you have to have bought that software in the European Union, following a ruling in Europe a number of years ago.
Why do people explore secondary software in the first place? Firstly, if you’re getting shot of software, that you got a surplus of you get some money back, it’s very unusual for an IT department to actually get some cash back for those assets for that surplus asset that you’ve sold. There are two types of players in the market. There are either brokers that work for certain titles that will just buy the software from you directly, you know, for cash, knowing that they’ll be able to sell it somewhere. Or there is also the marketplace and that’s where you can list your software for sale. That marketplace will broker an introduction to somebody who wants to buy it from you.
On the flip side, those seeking secondary software are going to get it at a much lower cost. And they don’t need to buy the latest and greatest software they can just buy the version that they need to support their infrastructure. So for some in certain circumstances is a really great option.