[sims] Academies, 'new' SIMS licenses and the EU concept of 'Exhaustion rights'

[localzuk]

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/1992/3233/regulation/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?

Edited March 24, 2011 by localzuk
fix typo

[GrumbleDook]

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?

[localzuk]

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.

[Sivadam]

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!)

Edited March 24, 2011 by Sivadam

[GrumbleDook]

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 ...

[matt40k]

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.

[PhilNeal]

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.

[localzuk]

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.

[vikpaw]

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?

[localzuk]

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.

[vikpaw]

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.

[localzuk]

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?

[featured_spectre]

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!

[matt40k]

Out of interest, what finance package are you looking at?

[featured_spectre]

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

[localzuk]

Out of interest, what finance package are you looking at?

 

The problem with finance packages is that FMS doesn't integrate with any payroll packages. So, if we were to look at Sage for payroll, and we stuck with FMS, we'd have to maintain 2 aspects of finance there rather than them being integrated. Whereas, if we went with Sage accounting too, they integrate - as do a lot of other finance packages.

 

So, we've looked at Sage at the moment, but I believe my manager is looking at others after suggestions from on here.

[vikpaw]

Does SIMS integrate with Sage? or anything else for that matter?

I'm having a 'mare at the mo' dealing with our Fees / Deposits and how if at all they get linked to FMS, let alone the invoice template from hell

[localzuk]

Does SIMS integrate with Sage? or anything else for that matter?

I'm having a 'mare at the mo' dealing with our Fees / Deposits and how if at all they get linked to FMS, let alone the invoice template from hell

 

Not as far as I know.

[matt40k]

Both SIMS and Sage have APIs that could allow someone to integrate them, so I wouldn't worry to much if that's the only thing putting you off a particular finance package. If Sage, or such, is so much superior than FMS, it won't be long before a SIMS\Sage link appears.

[scholarpack]

Having looked in depth at the differences between Academies and State schools on a software level, I find it very hard to believe that "extensive" changes to MIS are required, worthy of a hugely expensive new licenses. A few changes yes but extensive no. But if Capita want to price themselves out of these new style schools, I'm not complaining!

[matt40k]

Having looked in depth at the differences between Academies and State schools on a software level, I find it very hard to believe that "extensive" changes to MIS are required, worthy of a hugely expensive new licenses. A few changes yes but extensive no. But if Capita want to price themselves out of these new style schools, I'm not complaining!

 

MIS - I agree

Finance - No, massive changes, what better reason for FMS7!!

[featured_spectre]

MIS changes are minimal at best, Finance changes are different.

[GrumbleDook]

The changes to how you use the MIS can be quite significant, depending on how much you have tailored what you do in the school around the MIS, how much you have developed new routines / reports that are core of how the school operates and also on how adaptable staff and parents are to change.

 

Each school will be different ... I know of schools who are still feeling the pain of changing MIS provider 3 years ago (some to SIMS, some from SIMS and some never even knowing SIMS at all).

[scholarpack]

The changes to how you use the MIS can be quite significant, depending on how much you have tailored what you do in the school around the MIS, how much you have developed new routines / reports that are core of how the school operates and also on how adaptable staff and parents are to change.

 

Each school will be different ... I know of schools who are still feeling the pain of changing MIS provider 3 years ago (some to SIMS, some from SIMS and some never even knowing SIMS at all).

 

 

But we are talking about two different things that are quite separate. On one hand there is software functionality (which is what Phil is talking about). On the other is actual MIS use in a school and any custom work they have done around that. I'm not disputing that a change to an Academy would lead to an MIS being used in different ways with regards to in school reporting etc, but there would be little core software functionality required to be changed to handle this - yet of course it's in the interest of large MIS suppliers to have schools believe otherwise to justify such licensing expenses.

 

.....and if schools are still feeling the pain of changing suppliers 3 years later I would venture that the new supplier has done an incredibly poor job of the migration.

[zag]

We went with corero for our finance system when we became an academy.

 

Seems ok so far and is totally SQL server based.