A U.K company has found a viable business model in procuring Microsoft product licenses from companies going out of business and reselling them to other customers.
Since November 2005, Disclic has been gathering up Microsoft product licenses from companies that are being divested and distributing them through Discount-licensing.com, a Web site and the trading arm of the company, Noel Unwin, a director of Discount-licensing.com, said Monday.
Unwin acknowledged that transferring an existing product license to another customer is not an entirely new concept, as Microsoft resellers and companies merging already do this. However, he said Disclic is the only company he knows of that exclusively procures licenses and resells them to new customers under the legal terms and conditions Microsoft sets forth in its licenses.
"What we're doing is taking them to the masses," Unwin said.
Disclic acts as the license-procurement arm of the business, securing licenses from companies that are being divested, he said. Disclic has relationships with consulting firms such as KPMG LLP, which lets Disclic know if and when a client is going out of business and has active Microsoft licenses.
Discount-licensing.com then brokers the legal transfer of those licenses to other customers for a pro-rated price based on the time left on the license, he said.
Typically, the licenses are sold at a 20 percent to 50 percent discount to licenses Microsoft resellers sell to customers, Unwin said.
Discount-licensing.com has sold several thousand licenses to customers ranging from home users to multinational companies with 100,000 employees, Unwin said. Those customers are primarily in the U.K., but the company also has sold to customers in other European countries, such as the Netherlands and Switzerland, he said.
Discount-licensing.com so far has not had customers in the U.S., Unwin added.
A Microsoft spokesman from its public relations firm Waggener Edstrom Inc. said there are legal provisions for Microsoft U.S. product licenses that allow them to be transferred, but the terms and conditions are different from those in the U.K. However, it is legal in various countries to transfer existing Microsoft product licenses when a company is being divested, he said.
Office 2000, Office XP and Office 2003 are among the most popular licenses Discount-licensing.com has sold to customers, followed by Windows Server, SQL Server and Exchange Server, Unwin said. The company does not resell Windows OS desktop licenses.
Unwin said Disclic is a Microsoft partner and has a favorable relationship with the Redmond, Washington-based vendor, making sure license transfers to customers are legal. He acknowledged that Discount-licensing.com also competes with Microsoft, because it might resell a license to a customer whose only other option for buying more licenses is to purchase an upgrade to the next version.
In the end, however, Microsoft is still a winner because it's likely customers will upgrade to new versions of the software in the future anyway, Unwin added.
"The good thing is, even though you might have a company that would purchase the extra 50 [licenses] of Office 2000 licenses [from us], they eventually will roll out the latest versions," he said.