Buying and selling used software: an interesting business opportunity for UAE and GCC

Corrado Farina, partner of GoToTerraAs already discussed in another article about this topic, software represents a considerable cost factor for a company.

The purchase and resale of used software can facilitate significant software budget advantages. By purchasing second hand software licenses you can save money in comparison to the manufacturer’s price, even receiving exactly the same product as the first buyer.

If you have superfluous commercial software licenses, you can earn money with software, by selling your excess used licenses and redirect part of the capital you have invested back in your company. We got the occasion to interview, Corrado Farina, Partner of  GotoTerra GmbH (details at the end of this article), who already gave us a technical support for the editing of the first article about this topic.

Dear Corrado, explain our followers something about this important action performed by Court of Justice of the European Union

The Court of Justice of the European Union ruled that the conclusion between parties of a user license agreement, accompanied by the transfer from the copyright holder to the customer of a computer software, for use for an unlimited period of time in exchange for a fee constituted a “first sale”. Hence, copyright holders of computer software in the European Union exhaust the right to control the sale of their copyrighted software when they first sell it, so long as the copyright holder is not able to use the licensed software after resale. In this way it has been officially sanctioned the legality of the sale of used software licenses. And this has given a further boost to a business whose worldwide turnover is 2 billion euros. The business is currently concentrated in Europe: Germany and Switzerland, first of all, gradually extending to all the other European countries. In Italy it is still a rather new method.

Which is the core business of your organisation?

With the support of a partner we buy and sell licenses and contracts in volume in all EU  countries: we are specialized in Microsoft used software (version 2007 onwards). Our customers are companies with a minimum of 30 seats. By purchasing used products a company is saving from 40 to 70 percent compared to the vendor price list: a significant advantage in a difficult period as this one. And advantage also for the companies selling the licenses.

You also sell the latest versions of Microsoft products?

Yes, but in this case the saving is much lower: for example, we offer Windows 8 with a value about 15 percent less than the vendor price list.

The licenses sold by GoToTerra are purchased in Europe.

Yes, we can deal only in EU. So a company that is outside this geography need to have a sub o a parent company in EU, otherwise need to rule the local Law that usually doesn’t allow it. We always pay cash when we buy and we always work with a partner that a leader in this market. Often the sale of the software is not total, but partial, since there are companies selling only the licenses in excess, cause of a partial reduction of their staff, a shift to the cloud or other reasons. In such a way they can recover a significant part of the investment already made.

How is this working?

At the time of the sale, so when we buy, we sign a contract that identify the owner of the licenses with all the data (number of agreement, name of company, etc); the same documents are then sent, when we sell those licenses, to the new owner and notified to the old one. In this way, the old and new buyer can always demonstrate the origin / destination of the software, while those who give licenses are committed to uninstall the software from their computers all sold. It ‘a system based on good faith, but this is the same model that the vendor adopt when they sell new. So we reshape a model that is used all over the world.

What about the Dubai and GCC market?

At the moment we are still exploring the Dubai and GCC market. Although there is no precedent we can look for guidance regarding the principle of copyright exhaustion in the UAE, we expect that software made available to a customer with a user license agreement will be governed by the terms of that license agreement, irrespective of whether the term of use is for an unlimited period of time. In the UAE, computer software is protected from unlicensed exploitation by the Copyright Law; hence transfer by the copyright holder to a customer of a copy of a computer program, accompanied by the conclusion between the same parties of a user license agreement means that the customer only has the right to use the software subject to the license agreement.

It can be assumed that the UAE courts will interpret the transaction described above as a “first sale” wherein the copyright holder is deemed to have exhausted their right to distribute the software once they execute, for a fee, an unlimited license agreement with a customer.

In the meanwhile the used software can be always a business opportunities from UAE and GCC companies purchasing from their locations or affiliates in Europe.

We thank again for the technical support, Corrado Farina

Tel.+39 335 8346662

Mail: cf@gototerra.com

Website: www.gototerra.com

______________________________________________________

GotoTerra GmbH

Gewerbestrasse 15, 3600 Thun, Switzerland

 

 

One thought on “Buying and selling used software: an interesting business opportunity for UAE and GCC

  • July 10, 2014 at 11:08 pm
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    With the growing technology advancement today, it’s imperative for business owners seek new ways to improve their company. Here at Computer Solutions Unlimited, we provide our clients with end-to-end solutions for all of their technology needs- at prices that will work for their business. CSU is conveniently located in Palm Beach Gardens.

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