Exclusive A second software licence broker has been kicked out of the Federation Against Software Theft (FAST) in what appears to be a crackdown against those selling its members' software at discounted rates.
Value Licensing has had its application for renewed membership FAST turned down, it has told The Reg.
The company specialises in selling second-hand Microsoft licences obtained from bankrupt and liquidated companies that it sells for an up to 80 per cent discount.
Its customers include SMEs and corporate types and its biggest sale to date has been the offloading of a whopping £1.3m in unwanted Windows software from collapsed retailer Comet in 2012. The software was broken out from Comet's volume licensing agreement.
Value Licensing is the second software licence broker to be kicked out of FAST.
Discount Licensing became the first member in the history of FAST to have its membership torn up, earlier this month.
Discount Licensing was kicked out following a legal settlement with fellow member Microsoft over claimed copyright infringement on the sale of US software licences in Europe.
FAST said it ejected Discount Licensing because of "uncertainty" around the legality of "certain" second-hand software sales. Discount Licensing had joined FAST in 2009.
Value Licensing managing director Jonathan Horley told The Reg he was surprised to have his company’s FAST membership renewal turned down given FAST had lobbied him so hard to join in the first place, during 2012.
“It’s a shame,” Horley told us. “It’s was useful to have the FAST logo on the website.”
But, Value Licensing has fallen victim to a policy under chief executive Alex Hilton excluding software brokers from membership.
Value Licensing was approached to join FAST in 2012, but it was in February 2013 that FAST got a new chief executive – non-executive director Hilton.
Hilton is credited with having run Microsoft’s anti-piracy business.
Hilton would not discuss the details of the Value Licensing black-balling but he told The Reg Wednesday he’d been approached by five companies selling second-hand software since becoming CEO and that they had not been admitted.
“As chief executive, the buck stops with me,” he told The Reg. “It’s not a random, knee-jerk reaction. It’s a considered action I’ve taken on behalf of the members [of FAST].”
Hilton said he is representing the interests of the membership of FAST, whose core constituency is those who make and sell software.
He said software that is resold calls into question the “value proposition and pricing policy” of the software companies. “The vendor develops their intellectual property and it’s their licence to sell as they see fit,” he said.
However, Value Licensing says on its website it’s a registered Microsoft partner and reseller and Horley reckoned he’d never had any problems with Microsoft in its dealings. Further, Horley said Value Licensing “follows the rules” – it does not, for example, sell software licences meant for educators to business customers.
Horley claims to sells to most of the European Union. He claims that by buying unwanted Microsoft licences, customers can save between 25 and 30 per cent on the price of Microsoft Office, up to 50 per cent on an Office Windows and core CAL bundle, and up to 90 per cent on the price of older versions of software.
Companies like Value Licensing make their money by exploiting the latitude provided by a July 2012 European Court of Justice ruling involving Oracle.
The database giant had brought a case against UsedSoft, arguing its licence agreement stated its software could not be resold.
It now seems FAST’s leadership is now acting despite the apparent freedom to trade granted to companies by that European ruling.
FAST is well-known for prosecuting individuals and companies on software piracy and abuse of its members' licences.
Hilton refused to say whether having now blocked FAST to those reselling software licences it intended to follow up with legal enforcements. ®