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MIS Systems Thread, Academies, 'new' SIMS licenses and the EU concept of 'Exhaustion rights' in Technical; So, I've been doing a bit of research into the way in which Capita wishes to charge schools that become ...
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    localzuk's Avatar
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    Academies, 'new' SIMS licenses and the EU concept of 'Exhaustion rights'

    So, I've been doing a bit of research into the way in which Capita wishes to charge schools that become academies a new license fee if the license they had previously been using was a LEA purchased one, and I've come across the exhaustion principle from the EU Software Directive (aka directive 2009/24/EC).

    Specifically this section "The first sale in the Community of a copy of a program by the rightholder or with his consent shall exhaust the distribution right within the Community of that copy, with the exception of the right to control further rental of the program or a copy thereof."

    It does seem to have been included in the UK enactment of that directive here - http://www.legislation.gov.uk/uksi/1...ulation/4/made

    How does that square against Capita demanding a new license? Should the LEA not just be able to 'resell' our original license to the academy?

    The license when purchased is a perpetual license, so its use isn't 'rental', and becoming an academy doesn't make a copy of that license, it simply transfers ownership to the new entity. Surely this should mean that it can be transferred and Capita can't complain?
    Last edited by localzuk; 24th March 2011 at 08:44 AM. Reason: fix typo

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    GrumbleDook's Avatar
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    IIRC (and whilst I am sure Phil or others can correct the chances are they would struggle to make anything other than a reference to official statements) the Academy is a different institute to the one which originally purchased the licence or had the licence purchased on their behalf. This is why you get a new DoE number, have hoops to jump through if you are a charity or are linked to a trust ... it is in all legal senses a new school.

    It would be like the LA closing down a school due to falling numbers and then 3 years later a free school gets set up by local parents, uses the same buildings, has the same Head, the same teachers and the same name ... but it isn't the same school. Some companies are willing to do transfer of licences but Capita would have problems doing this for a few reasons. As they have a significant market share (not using the 'M' word ...) it could be construed as anti-competitive by other MIS providers if Capita give a massive discount to what is legally a new school due to them already having a toe-hold in place. I am aware of one MIS provider using this argument already. So, Capita either have to cut their prices for everyone or have to charge the full price (or whatever they end up negotiating due to changes of support due to the lack of use of local/LA resources).

    I'm not saying it is right or fair ... but when we have seen BBC JAM crushed by suppliers stamping their feet because they want their cut, should we be surprised by others making sure they get a good stab in taking schools away from existing MIS providers?

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    localzuk's Avatar
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    We don't get a new DoE number.

    However, your post doesn't take into account the concept I mentioned above - that of the resale of software being legal within the EU and UK under that directive. So, the LA should be able to 'resell' the license to us.

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    Sivadam's Avatar
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    Quote Originally Posted by localzuk View Post
    We don't get a new DoE number.
    The original school bought the licences at a discounted price from the LA. The amount of discount I guess depends on which LA the school is attached to.
    I wonder if it would be a compromise to pay the difference between the two figures, for Academies that retain the same establishment number. There would have to be some sort of method of calculating the effect of inflation though!

    (Just a vague idea Phil! I know that the LA Licences prevent novation!)
    Last edited by Sivadam; 24th March 2011 at 02:21 PM.

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    GrumbleDook's Avatar
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    Quote Originally Posted by localzuk View Post
    We don't get a new DoE number.

    However, your post doesn't take into account the concept I mentioned above - that of the resale of software being legal within the EU and UK under that directive. So, the LA should be able to 'resell' the license to us.
    Whilst the LA might be able to sell the license (which is for the version available when it was purchased) you would still have to pay an upgrade fee (as others have done with versions they had from when purchased as a GM school), but that does not stop other MIS providers taking legal action against the LA or Capita for preventing open competition. The LA is also within their rights to charge you an arm and a leg for this (if they were going to sell it) because you would have to consider the licence as an asset. If the license is the property of the council then they have a duty to the tax-payer to get the most for this asset when sold.

    It is catch 22 ...

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    matt40k's Avatar
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    If you think about it in the case of physical land and buildings, the LA must have been given a huge discount but they are transferred to the new Academy for no cost.

    Still if re-licensing means FMS7/8, then it's worth every penny.

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    If your LA bought SIMS it will have done so under extremely favourable terms in comparison to a single school purchase because dealing with one purchaser is much more economical than dealing with several hundred. As a consequence our LA licence agreement specifically rules out novation of licences to bodies outside the LA (or its successor body).

    There are a number of reasons why we require an academy to purchase SIMS in its own right:
    1. We have had to make extensive changes to the software both in finance and originally the statutory returns. These changes have to be funded by the academy sector.
    2. Academies rightly test the market to ensure they are selecting the best system going forwards but that comes at an enormous cost to us we have to employ people to demo, create marketing materials etc or we will get out sold.
    3. We are wary of being accused of using our market strength to keep competitors out.
    4. Even after licence fees our charges compare very favourably with leading competitors.
    5. LAs are able to transfer their licence to other schools under their control although I accept that is less likely to happen than it used to be
    The government has made 25K available to new academies for start up costs such as transfer costs of buildings and purchasing appropriate software.

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    localzuk's Avatar
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    Quote Originally Posted by PhilNeal View Post
    If your LA bought SIMS it will have done so under extremely favourable terms in comparison to a single school purchase because dealing with one purchaser is much more economical than dealing with several hundred. As a consequence our LA licence agreement specifically rules out novation of licences to bodies outside the LA (or its successor body).

    There are a number of reasons why we require an academy to purchase SIMS in its own right:
    1. We have had to make extensive changes to the software both in finance and originally the statutory returns. These changes have to be funded by the academy sector.
    2. Academies rightly test the market to ensure they are selecting the best system going forwards but that comes at an enormous cost to us – we have to employ people to demo, create marketing materials etc or we will get out sold.
    3. We are wary of being accused of using our market strength to keep competitors out.
    4. Even after licence fees our charges compare very favourably with leading competitors.
    5. LAs are able to transfer their licence to other schools under their control although I accept that is less likely to happen than it used to be
    The government has made 25K available to new academies for start up costs such as transfer costs of buildings and purchasing appropriate software.
    I can see some of the reasons and understand them, however from the point of view of the academies, what we see is that we have been happily using a piece of software for 10+ years and due to a change of status suddenly we have to pay out 14k in new license fees for something we'd already been using! That 25k you mention, as i'm sure you know, barely covers the legal costs involved with transferring to academy status!

    Your competitors charge significantly less for new customers to start up, so from my point of view you are making it very difficult for us to choose SIMS.net over other products due to that massive cost difference. This can and will affect your bottom line, in that you'll lost long term revenue due to this.

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    vikpaw's Avatar
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    My question is, it's such a pain to change MIS, alongside the move to becoming an academy, are you going to go for something else localzuk or will you just stump up the cost?

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    localzuk's Avatar
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    Quote Originally Posted by vikpaw View Post
    My question is, it's such a pain to change MIS, alongside the move to becoming an academy, are you going to go for something else localzuk or will you just stump up the cost?
    I don't know for sure yet, we're still looking at the various options but as I said, us staying with SIMS.net with that initial license cost is putting SIMS.net at a serious disadvantage and may well force our hand to switch.

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    vikpaw's Avatar
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    I can see you're desperate to stay. It'll be a shame to see someone of your skills leave our ranks, though it doesn't look like this loophole you've found holds much water.

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    localzuk's Avatar
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    Quote Originally Posted by vikpaw View Post
    I can see you're desperate to stay. It'll be a shame to see someone of your skills leave our ranks, though it doesn't look like this loophole you've found holds much water.
    Well, the work involved with moving will be considerable - training, rewriting various programs to handle export from a new system, labour to remove SIMS from machines.

    I'm not desperate to stay or to leave, my views with it are neither hugely pro or anti-sims. The question is - do the retraining and rewriting costs come close to the cost of the license fee?

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    nephilim's Avatar
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    In most cases the training, and cost to reinstall etc, is nowhere near 14k. We are looking at it ourselves as we are looking at becoming an academy. And you are right, the 25k from the government just about handles the legal fee's, so we still have to stump up the cash from somewhere!

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    matt40k's Avatar
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    Out of interest, what finance package are you looking at?

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    nephilim's Avatar
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    Our place wants to stick with FMS, but it is all based on the monies.

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