Media: SaaS Software Licensing Risks in M&A - Interview
CTO Labs Joshua Hinton spoke to Mi3 Australia about SaaS Software Licensing Risks, a feature of M&A tech advisory engagements.
In his article for Mi3 Magazine Editor Andew Birmingham lifts the lid on the under utilisation of Software as a Service (SaaS) licenses, estimated to be as low as 25%. CTO Labs Joshua Hinton discussed the risk as one much broader than just a licensing cost, and it's a difficult terrain to climb.
".. there is potentially a more significant risk than just the cost to enterprise of SaaS licensing", according to Josh Hinton, partner and co-founder at CTO Labs, a specialist Mergers & Acquisition technology advisor.
"Some customer's contracts have clauses within their intellectual property rights where anything that is written on top of the software is inherited into the software developers license, and they have a right to redistribute that software out to their other customers. That intellectual property right would basically mean that your investment in any development on top of their software would be then legally publishable to your competitors," he said.
"We see that in about 10 to 15 per cent of the transactions we do."
"It has different implications, not just on licenses, but everything from the security posture, to the ability to standardise content across the organisation. And it basically makes it challenging to understand your total spend on software, but also to standardise. You can see a tension there between standardisation and speed to market."
It's a good read - we've linked it here.
Keen to get a clearer handle on your IP License Risks in transactions? contact the M&A team below.
