Business software users are being offered the chance to trade in used software like they would a second hand car. A Staffordshire-based company is offering reductions on new software if old versions are handed in for resale.

Staffordshire's Discount Licensing has started a trading scheme because its business of selling used software licences is running out of licences to sell, according to co-founder and director Noel Unwin.

Discount Licensing has been trading for a year, selling used licences for older versions of Microsoft software and operating systems to companies that do not need brand new updates. The company claims to be able to offer discounts of up to 80 per cent on the list price of the software at its original launch.

"We have a lot of companies that actually are constantly looking for non-current versions because businesses don't want to be forced into buying the current version and then be forced into using their downgrade rights to use a non-current version," said Unwin.

The company has been sourcing licences from companies that have gone into liquidation. Unwin says that while computers had been sold off as assets by receivers, nobody had previously thought of re-selling software licences.

"The idea was how would we be able to realise a value for an asset that had potentially been unrealised," he said. "Because nobody knew the licences existed as an asset, it was just being overlooked."

The business is legal because Microsoft allows a software licence to be transferred, but it is vulnerable to any change in the software giant's terms and conditions, as Unwin admits.

"If Microsoft found a way to block a secondary market we would be in a position where the business would have about four to five years left of trading," he said. "So we are vulnerable, but not to the point where it would be a show-stopper from day one."

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