Slashdot Mirror
Used Microsoft Licenses For Sale
An anonymous reader writes "A secondhand dealer in Britain has been given the green light by Microsoft to resell software licenses from insolvent or downsizing companies, ZDNet is reporting. The reseller, Disclic, is legally allowed to sell the licenses at a discounted rate of between 20 percent to 50 percent, much lower than Microsoft's resellers. Partners of the software giant have expressed unhappiness over the issue as it undercuts their business. "I've never heard the like, and I am stunned," said Gordon Davies, the commercial director of Microsoft reseller Compusys. "This is clearly going to take away revenue from the channel and from Microsoft," he said."
The supply of these licenses is limited and must be labeled "used." Sure, CDs are CDs but it still is a different product. Competitors are free to negotiate a similar license, or even buy these cheap used copies from the reseller and resell them themselves at a tiny profit.
This situation makes me think of the whole (wrong) idea of predatory pricing. It doesn't exist. In 1904, Henry Dow exported bromine to Germany, to sell at a price far below the cartels. The cartels decided to drop their price below cost to destroy Dow's business. Dow bought their sub-cost Bromine and resold it to the German market at a hefty pricing.
This deal is good for budget-conscious consumers and will only be a blip for most resellers. There are numerous ways for them to compete. Whining to Microsoft is not an answer.
In a perfect world, isn't this how it should work anyway?
What's interesting is M$ is consenting to it???
Car makers have to compete against a huge used market and still survive (well except maybe GM).
This is a great idea, if everyone can make some money and in turn people save money form not having to buy full priced ones. Of course the resellers are worried, but there will be a limited supply, eventually companies will have to go back to them. And resellers will have the newest versions, which used licenses typically won't be for.
KeepTrackOfIt.com - Find the lowest gas prices in your area graphically
...Gordon Davies would be so "stunned" if he was a creditor owed money by a liquidated company. This is great news for creditors, because they've got more money in the pot to cover the debts owed.
And at the same time, people get cheap software. And I don't really think this will be taking business away from Microsoft resellers - the article doesn't mention it, but I assume this second-hand software won't come with any of the additional support bundled with new programmes.
I'm glad to see this come about. So maybe this is only OK'd in the UK, but is there anything preventing American companies from purchasing licenses abroad?
-- Knowledge shared is power lost. -- Aleister Crowley
Usually you get a discount on used items because the item's value has decreased due to said use. Using a license for software does not degrade the quality or value of that software, so why should there be a discount for a used license? On the other hand, maybe you are taking a risk in that the license might still be in use by another guy (or leaked on the Internet) and the key or whatever will be deactived. I do find it really wierd that Microsoft gave this guy the go-ahead, though.
Software has been (legitimately and legally) bought and sold on e-bay for some time now. Does anyone think that a few more Windows 2000 users is bad news for Microsoft or its resellers? It's just another way of increasing the potential market for the next version (not counting those of us that know that newer!=better).
It is often said that windows' largest competitor is their older OS's. If businesses could resale their Win 2000 licenses, they might be a little more interested in upgrading to Vista.
Furthermore, these "used" licenses would allow MS to compete with other low cost operating systems. Granted, MS would not make anything of the sale, but since they will be making mad money lute from their future subscription services, they should be able to maintain a profit...maybe
This is just a smart tactic to create lockin and ensure future revenue.
That story is cool, but it does not apply to all cases of predatory pricing. It only worked because the cartel was charging different prices in different countries. In this age, the only situations where that happens it is backed by law preventing someone like Dow from doing what he did.
When a large company prices below the market value (be it in the world market or a walled off local market), and they have deep enough pockets to take a small loss, then there is nothing that the small companies can do about it. They can't buy up the product and resell it, as it will still be more expensive than the original. Predatory pricing does exist, and a single anicdote does not dispel that fact.
***mart in small town areas. Happens a lot and is quite researchable. They come in with a new store and it is tremendously cheaper than all the local mom and pops. After these stores have been driven into bankruptcy, ***mart puts their prices back up to their normal range. I have an aquaintance was in the home appliance business for 30 years that this happened to. His wholesalers, who also supply ***mart, would not sell him one single unit cheaper than what the new ***mart had them for retail. In fact, they were trying to charge him a wholesale dealer price of around ten to fifteen dollars more a unit. This happened exactly as the new store opened, their prices super low, he all of a sudden can't get normal wholesale prices or even any parity. Fairly coincidental timing. Granted, his inventory was small, but taken as a national collective, all the little independents added up had a hefty share at one time, tens of thousands have now been driven out of business. It takes them a year or two to destroy local stores, then they up the prices, business by business. You can search for the ***mart effect and how they manipulate prices locally, the info is out there, it is (apparently) standard operating practice with them across the country.
Anyway, if you are looking for other examples, the term is dumping, easy enough to find other examples.
One of the more interesting angles now, not dumping per se but close, a variation, is with counterfeit goods. Very hard to compete when your competitor has no need for R & D or market research or anything like that. In the news this week, the korean electronic manufacturers have completely given up trying to stop their wares being produced illegally in china, they realise the global fix is in. It is no wonder ***mart is such great biz partners with them, birds of a feather....
I dual boot XP and Ubuntu, so obviously I do "know better," but I still use Windows primarily. It's more stable, has more programs available, and it's easier for me to set it up how I like it. At this point I COULD switch to linux as my primary OS, but I really have no inclination to since it's a noticably less mature product. I support the open source movement all the way, and use quite a bit of open source software even in Windows, but I'm not about to call everyone who uses commercial software a moron or a crackhead.