News Stay informed about the latest enterprise technology news and product updates.

Selling used SAP licenses

Matthias Müller-Wolf, a former COO of SAP Germany and a speaker at the recent Sapience conference in Boston, discusses his presentation on selling second hand software licenses in Europe and the possibility for doing the same in the United States. The practice has become an attractive option in the recession with buyers looking for cheaper alternatives to new licenses and sellers looking for a way to get some return on their shelfware. There are some considerations, particularly with SAP licenses.


Read the full transcript from this video below:  

Selling used SAP licenses

Barney Beal: Hello. I am Barney Beal, the News Director with SearchSAP.com.
I am here at the Sapience show in Cambridge, Massachusetts,
where I have the chance to talk with Matthias Mueller-Wolf, who
is the former CEO of SAP Germany and is now serving as what is
essentially a broker of unused software licenses: taking
licenses that are being used by one company and selling them to
another. He talked to us a little about the market for that in
Europe and what that means for SAP users in North America as
well.

Thank you for joining us. Maybe you could tell us a little bit
about what you have learned about license swapping in Europe.

Matthias Mueller-Wolf: It is not only about license swapping; it is also about license
re-marketing. What has become very popular right now is that
people purchase or re-sell outdated or non-used licenses
anymore. The interesting thing about it is that you can generate
positive cash flow from licenses on the shelf if you sell them.
For other companies, if there is a demand, and they have budget
constraints or limitations, it is a very cheap way to acquire
licenses. This works pretty well with Microsoft licenses today -- with
Citrix licenses, Adobe, and all the other stuff, but it is also
gaining traction with SAP licenses. The big difference is that
with SAP licenses, you are required, or you should have a
maintenance contract, so this is what makes it a bit more
complicated than with other licenses without associated or
related maintenance. Our experience is, if you approach the
vendors like SAP, Oracle, or others, they are more than ever
willing to find and agree to solutions, even if you acquire
third party licenses or unused licenses from other companies.

Barney Beal: Are there things that they ask for in return? How does that
negotiation happen?

Matthias Mueller-Wolf: What they do is they proactively approach the vendors, and the
vendors figure out it is better to have an additional
maintenance revenue stream than not having revenue at all.

Barney Beal: Is this primarily in Europe? Have you seen something like this
in the States, at all?

Matthias Mueller-Wolf: It is primarily in Europe today, but what we have is we have
some US-based companies with subsidiaries in Europe where they
swap licenses because in Europe, this is a high court rule that
this is a legal thing. This has not happened so far in the US,
but we would expect that this would swap over to the US sooner
rather than later, but currently, the majority of the customers
are companies with at least subsidiaries in Europe.

Barney Beal: Do they need to be careful about what users are using any
applications when and where?

Matthias Mueller-Wolf: No, not at all. If they acquire the software in Europe, and if
they reassign it then to a subsidiary somewhere else on the
planet, that really does not matter because that is a common
practice in every software contract. You can swap users from one
entity to another entity or from one country to the other
country.

Barney Beal: Are there any other legal ramifications that they have come up
with this?

Matthias Mueller-Wolf: As far as I know, most of it is fear, uncertainty and doubt
because obviously the vendors do not like it. What we are doing
is we are eating their lunch. They would prefer to sell the
licenses twice or three times rather than supporting used licenses.

Barney: How does the buying process work? How do you connect the buyers
and sellers?

Matthias Mueller-Wolf: That is pretty easy. It sounds weird, but the crisis really
supported us because, and that is the interesting thing.
Whenever we approach companies where we would like to purchase
software, and we speak to the CFO, and once he understands the
concept, he understands that we are talking about cash because
at the moment, he is figuring out that he has licenses on the
shelf, and he is handing over the papers and the CD-ROM to us,
and we instantly pay him. This is not a case of
three to five years or a potential savings; we are talking about
net cash and net profitability. That is pretty easy to convince
them, on those days. On the buyer's side, it is just becoming
more and more popular. When you go to Google, and you ask for
software remarketing or used software, it is very popular right
now.

Barney Beal: Thank you very much.

Matthias Mueller-Wolf: You are welcome.

View All Videos

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchERP

SearchOracle

SearchDataManagement

SearchAWS

SearchBusinessAnalytics

SearchContentManagement

SearchHRSoftware

Close