Mergers and acquisitions may have a dramatic impact on a software license

The software industry is faced with a set of unique challenges when their customers are part of a spin-off, merger or acquisition. Where does the license to use software end up?  Does it cover the new situation or is additional payment required?

The physical world is not quite so complicated. Employees, buildings, inventory, equipment etc. is either here or there and the price of a physical asset is normally not related to external factors such as number of users, CPU’s, transactions etc.  But software typically is. The exact same software  (line of codes) can have a different price depending on a lot of different circumstances.

An article in PCWorld highlights some of the challenges to the Independent Software Vendor as well as to the customer involved in a spin-off, merger or acquisition.

Ending up in a law suit is the last thing anybody wants. Maybe it is worth while (for the ISV as well as the customer) to take a look at the License Agreement and mutually understand what the implications will be should a spin-off, merger or acquisition occur.