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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."
I can't wait for the day I can buy "used" mp3s too!
perpetually dwelling in the -1 pits
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
. . . a revised EULA in the next Fix Pack.
If, as TFA suggests, this is a loophole in the licensing agreements, a simple change to the already largely ignored EULA should adroitly close it.
Raoul Mitgong: Unhelpful.
I've got a couple of used Linux licenses knocking around if anyone wants one. At $349.50 that's 50% below the retail price! Offers to cheaplinux@mailinator.com
It's unlikely one second-hand dealer is going to change Microsofts fortunes whilst it might be beneficial to him it'd be hard to imagine enough 2nd hand licenses being found to come anywhere close to the ammount of new licenses required daily in terms of volume. "This is clearly going to take away revenue from the channel and from Microsoft," Yeah but how much? MS wouldnt've given the green light if they hadn't analyzed the situation and determined that it was very insignificant to them.
...Gordon Davies would be so "stunned" if he was a creditor owed money by a liquidated company. This is great news for creditors, because they've got more money in the pot to cover the debts owed.
And at the same time, people get cheap software. And I don't really think this will be taking business away from Microsoft resellers - the article doesn't mention it, but I assume this second-hand software won't come with any of the additional support bundled with new programmes.
From the Wikipedia article on first sale:
District courts in California and Texas have issued decisions applying the doctrine of first sale for bundled computer software in Softman v. Adobe (2001) and Novell, Inc. v. CPU Distrib., Inc. (2000) even if the software contains a EULA prohibiting resale.
M$ can grumble all they want, but (at least for some of us) reselling Windows is a legal right regardless of the contents of the EULA.
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
Partners of the software giant have expressed unhappiness over the issue as it undercuts their business.
"I don't like it because our competition is selling the product for less than we are. That will cut into our profits. How do people expect me to keep fuel in my Hummer and my Lear jet in the air? It's not fair!"
"I'm not impatient. I just hate waiting." - My Dad
At hamfests you always could find someone with gobs of copies of just out of date and old MS apps and OS's with the magical license sticker or certificate for dirt. Hell last year at Dayton you could buy unmarked offbrand OEM XP pro licenses for $25.00 each that register just fine.
This is simply large scale with MS's blessing. Others have been doing it anyways and telling MS to f themselves for years.
I bought 4 copies to sell with laptops I rebuild/recondition. Microsoft would call me a pirate/evil person but I really dont give a rats ass what they think. They register, validate perfectly and have the magical feel-good sticker with install key. That's all I care about and that is also all the people I sell the laptops to care about.
Do not look at laser with remaining good eye.
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).
Here is the link to the Disclic Ltd website...
w _software/
URL: http://www.discount-licensing.com/
There is also a more in-depth article on the topic here:
URL: http://www.channelregister.co.uk/2005/11/10/outla
Artificial intelligence is no match for natural stupidity.
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.
I totally agree that treselling used licences of MS is OK. It is logical and right. If you buy a licence for a Windows OS, no reason this licence can't be resold under the same terms...
However, it is important to note that licence is not a simple product like a TV screen or a fruit.
Here are three reasons:
1. Lets say a licence was bought discounted as part of a non-profit or educational licence pack (schools, universities, organizations..). Such a licence should not be resold to a business entity or a private user.
2. A licence bares commitments by the client, more than most products. For example, you are not allowed to share the product freely, or copy it. (maybe not only because of licencing issues but also because of such). In some cases, a licence allows the use of a product only to a specific person, or under specific terms (specific hardware, environment). For example, not allowing the use of a product by non-development personnel. Not allowing the use of a product on a multiple CPU computers, etc...
3. Partly like #2, licencing sometimes are regional. Some people suggest that if its allowed in the UK for now, it should be open to international trade as well. Well.. not necessarily. For example, some licences are regional. Sometimes for good reason (allowing 3rd world countries the use of software that is very expensive for them if they had to buy it in other countries). OR limits of technology/security export. Sometimes cross-border trading has to be limited. That is true - noone likes to be limited, but sometimes there might be a good reason to accept such limitation
Can't think of any other differences for now, but those two demonstrate in my opinion why there are some differences with licencing.
With that said, reselling of a licence under the same obligations/terms as the original purchase is something I think is very right and just and should be implemented world-wide.
Just my 2 cents.
"From the moment I could talk, I was ordered to listen" - Cat Stevens
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.
He's "stunned"
Well, according to Microsoft, it's within the parameters of the license agreement and MS has OK'ed the selling. So Davies is just pissed off because somebody can undercut him. Booo hoo.
Man, I'd never buy a used MP3 - you never know what you're gonna get. If the previous owner(s) didn't take care of it, it might be all scratched.
Unless it was a rare classic, then I might buy it.
Quote:
"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."
Ok I see this taking money from the reselling partners..
However Microsoft will be seeing $$$ signs.. Why well those extra licenses will end up on computers that likely have no more support. Therefore Microsoft stands to make a Significant amount of money at 200-250 per occurrence.
If I was a reseller I'd want a share of those profits. (Pun on Riaa)
***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 have a new laptop I bought recently that included a bundled Windows XP Home. It's a dedicated Linux box now, and I honestly have no use for Windows on the machine. Maybe sometime in the near future, I can resell the license and get my money back for something I never used?
it is scratched....
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.
You know the drill: IANAL, but I am a law student. Also, I view EULAs to be legal abominations that should not be enforced by state or federal courts for a number of policy reasons.
reselling Windows is a legal right regardless of the contents of the EULA
No. Reselling Windows is explicitly a legal right regardless of the contents of the EULA in those jurisdictions that have ruled so. A federal district court decision is binding only in that district. A district may be anywhere from a fourth to a whole of a state. California and Texas both have four districts, so based solely on your referenced decisions this behavior is explicilty allowed, as a matter of law, only in those parts of those states.
And even then, it's not a given. I'd have to read the opinions (don't have time now), but if the judges actually relied on federal law (copyright right of first sale) as opposed to sitting in diversity and applying state contract law (which EULAs tend to fall under), then it would be binding. If the courts relied on state contract law, then the decision isn't even binding on those state courts that fall within the district. It does, however, remain persuasive ("persuasive" being a term of art.) Also, sister districts within a state tend to look at each other as very persuasive.
As a quick refresher, federal district court decisions relying on federal law are binding on state and federal courts in those same districts. Federal circuit courts relying on federal law are binding on state and federal courts in those same circuits (which cover multiple states). Federal supreme court decisions relying on federal law are binding on state and federal courts throughout the nation. If any federal court sits in diversity and relies on state law, then the decision is only persuasive, and is less persuasive outside of the federal court's jurisdiction.
- Neil Wehneman
My legal education, in nifty podcast format