British reseller reportedly sues Microsoft for £270M

British reseller reportedly sues Microsoft for £270M

Claims Microsoft is persuading companies to take up cloud-based software with discounts to give up perpetual licences.

Credit: Microsoft

UK-based reseller ValueLicensing is reportedly taking on Microsoft to the tune of £270 million, roughly US$371 million, in damages over allegations it is hurting the second-hand software market, according to the Financial Times

Jonathan Horley, the founder and managing director of ValueLicensing, accused Microsoft of persuading companies to take up cloud-based software with discounts to give up perpetual licences, the British newspaper said. 

ValueLicensing’s business model operates, as per its website, by buying fully paid perpetual Microsoft software licences that were first placed on the market within the European Economic Area, and then selling them second hand, claiming that they provide savings on licences of up to 70 per cent. 

Some examples of these licences include applications such as Office, Project and Visio, operating systems and servers. 

Horley said in an FT interview that “customers have no choice but to move to its subscription model” as Microsoft allegedly has an incentive to move to its customers over to cloud-based software, which would remove old licences from the existing market. 

As a result, the FT added that the resale market is shrinking with software licences diminishing in value. 

Some of that action Microsoft has taken previously, as highlighted by the Financial Times’ reporting, includes it altering its perpetual versions of Office in February. As published on ARN from sister publication ComputerWorld, this includes slashing support to five years and raising prices by 10 per cent . 

By doing so, this makes the software less attractive in any comparison with Office 365/Microsoft 365 and has forced customers who want or need perpetual licensing to deploy every version. 

Additionally, a month earlier, partners in Microsoft’s Cloud Solution Provider (CSP) program gained access to perpetual software licences following their entry into general availability

The licences, which are available to enrolled direct bill partners, indirect providers and indirect resellers, can be sold for on-premises deployments. 

Tags MicrosoftValueLicensing


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