Relicensed Software: Startup Capefoxx Helps Companies Save Costs and Act Sustainably

Do you know if your employees and colleagues are using the software they truly need? The fact is, almost all companies are either over-licensed or under-licensed. This means they pay for software they do not use or use products beyond their licensed scope. This can potentially lead to claims from the manufacturers. The startup Capefoxx assists corporations such as Miele or Renault, as well as small and medium-sized enterprises, in optimizing their software lifecycle. Existing licenses are thoroughly reviewed, and unnecessary products are resold to other companies. Slightly older licenses can be acquired cost-effectively through this system. After all, does every employee really need the latest version of Excel? Larger companies, in particular, can save millions of euros with Capefoxx. We spoke with Capefoxx founder Thomas Huth about his long fight for the legalization of software license resale and a current cooperation project with the major automotive supplier ZF Friedrichshafen.

Thomas Huth from Capefoxx

Thomas, what is behind the term relicensed software or used software, and how do you support companies?

No company, from startups to established corporations, can operate without software. Some products are custom-made, while others—like those from Adobe or Microsoft—are standard for most businesses. Purchasing these software licenses is particularly costly for larger companies.

We help companies optimize their software licenses. This means we first determine what they need and what they already have. In nearly 100 percent of cases, there is either under-licensing or over-licensing—or even both, too much of one and too little of another. When manufacturers notice this, there is little room for negotiation, and relicensing becomes very expensive since using unlicensed software can even lead to claims for damages.

Before turning to the manufacturer in such cases, it makes sense to contact us. An affordable alternative to new licenses from the manufacturer is licenses already acquired by other companies—relicensed software or used software. With software, as in many other areas of life, it doesn’t always have to be new! Since software licenses are intangible usage rights, they do not wear out at all, and a used license is identical to a new one.

How much do companies save on average through your service?

By purchasing older versions, companies can save up to 70 to 80 percent compared to the latest license. Even with the latest versions, the cost savings are still at least 30 percent compared to the manufacturer’s price. Recently, we equipped a large client. Instead of investing about one million euros in the latest licenses from the manufacturer, the team only had to pay 300,000 euros with us—and all employees still had the software they actually needed.

This should also have a positive impact on the companies’ environmental balance.

Exactly. Older versions usually have a significantly better environmental balance. They require less storage and use less processing power. Less data is sent over the internet. This results in significantly lower energy consumption by data centers. Additionally, the hardware can be used longer.

The software manufacturers are probably not very enthusiastic about your offer?

We have gone through a long legal battle over several years up to the European Court of Justice. The manufacturers originally did not want their licenses to be traded. You can buy and resell a book, but not a software license? We found that absurd and challenged corporations like Microsoft and Adobe—with the result that we can acquire and resell licenses in the EU and the European Economic Area as well as on the UK market. We guarantee legal compliance to our customers with the help of partners like Deloitte and KPMG. Of course, we recognize the performance of the manufacturers. But with the sale of the licenses, the “principle of exhaustion” applies in EU countries. It states that the exclusive right of the copyright holder to distribute a copy of a copyrighted product is exhausted with the first legal sale.

You now count large corporations like Renault and Miele among your customers. How do you get to know them?

We have a large network. Additionally, we attend industry events and give talks about our work. Often, there are initial reservations. In conversations, you can see how targeted questions test whether we really know the subject matter. Mutual trust is very important in our field.

The automotive supplier ZF Friedrichshafen is also one of your customers. Can you tell us a bit more about this cooperation?

Of course. The contact with ZF Friedrichshafen came about through the network of one of our employees. The company now has almost 170,000 employees and therefore uses a lot of software worldwide. Most of it is purchased through the headquarters in Germany. After they switched from the purchase version of Microsoft Office to the cloud version a few years ago, they contacted us to help monetize their now unnecessary purchase versions. Together, we first determined how many Microsoft licenses were in use at ZF Friedrichshafen and which ones had a fully documented license chain according to our requirements. We were then able to acquire and resell over 90 percent of these licenses. The remaining 10 percent were licenses that were either purchased outside the EU/EEA or where important documents were missing.

Were there any other particular challenges in this project?

The most important factor in any project is whether the licenses were acquired in countries where EU law applies. The second major issue is the quality of license management: In the case of ZF Friedrichshafen, there was very good in-house license management. If the documentation is missing and we cannot clearly and comprehensively trace who holds the rights, we stay away from the licenses. We have many customers where we can only use 40 to 50 percent of the licenses for this reason. With ZF Friedrichshafen, we ultimately acquired licenses worth several million euros.

But you also work with smaller companies?

The process of auditing licenses, which we conduct with the help of our partners like Deloitte or KPMG, is very complex despite using specialized software. Therefore, our customers in this area tend to be larger corporations. However, among the companies purchasing the licenses, there are also many small and medium-sized enterprises that want to save money and act sustainably.

Do you actually have a lot of competition in your field?

No, not really. When we first secured the right to trade in licenses, there were some copycats, and a few of them still exist. I actually have to warn against bad actors in our field. Companies should carefully check who they are working with. We are certainly among the three largest reputable providers in Europe.

 

Contact

Website: capefoxx.com

LinkedIn: Thomas Huth