If it's true that software licensing is an increasingly complex business for most customers, the same can also be said to apply for a very large number of resellers. Trying to stay on top of the topic and making the necessary investment to be able to provide effective licensing agreements for customers can prove to be a significant drain on time and resources.
Given the circumstances, it should come as no surprise that Bytes Technology Group - a reseller which has built a strong reputation and about 60 per cent of its turnover on software licensing - should seek to gain an advantage.
What may come as a surprise, however, is the way in which it has chosen to do so. While the traditional Bytes operation is busy competing against traditional resellers for licensing business, a separate operation with its own brand is helping other resellers plug the gaps in their licensing knowledge to win deals with their customers.
That operation is called Pure Licensing, a business which Bytes software services director Zak Virdi claims is designed to be a neutral brand that resellers feel comfortable about taking to their customers.
"It allows resellers the benefit of not having to invest in salespeople with licensing knowledge," he says. "They can bring one of our people in as the front end of the deal. Effectively, we're offering an outsourced licensing department for resellers."
In addition to allowing resellers to sell licences to customers without having to shoulder the expense of getting qualified to do so, the division also gives them the ability to hold onto customers who might have gone elsewhere if a reseller was unable to provide the licences.
"The vendors are assured that if we're engaging with the customer, it will be getting the proper licensing advice and the right agreement," Virdi adds.
There is also a Pure Licensing Web site that resellers can use and which they can brand themselves, although he admits it's not something many of them do because "most customers don't want to order electronically anyway". But it gives resellers the option of pointing their customers to a neutral site where they can get information about licensing.
Virdi estimates that as many as 60 resellers use Pure Licensing to supply over 100 customers. But he argues that for it to succeed and avoid the fear that it might pass on details of resellers' deals to Bytes, Pure Licensing has to keep everything "very black and white" - there definitely has to be a formal agreement.
He stresses that if a reseller approaches an existing Bytes customer, Pure Licensing will rule itself out of the equation. The same also applies if a reseller approaches another account where Pure Licensing is already involved through another dealer.
"The potential conflict is huge, so you have to be very clear about how you approach it."
He says the fact that the scheme is "working well" - and it's been running for four years or so - demonstrates that Pure Licensing is taking the right approach. "We want to encourage resellers to bring us good quality opportunities and we reward them for doing so. They can do very well out of it, while it allows us to protect their margin."
And Virdi is quick to point out that "some resellers have done very well out of it".
This was first published in June 2002