Industry is shifting, says SoftwareOne as it sells stake

Global licensing specialist wants to capitalise on shift to cloud after selling 25 per cent of the firm to investment firm KKR

Software licensing giant SoftwareONE is gearing up for a cloud and services push after taking on growth capital from global investment firm KKR.

KKR has taken a 25 per cent stake in the 2,500-strong reseller, which is headquartered in Switzerland and has operated in the UK since 2008.

The four founding partners and existing shareholders, together with management, will retain a 75 per cent chunk of the shares.

Founded in 1985, SoftwareONE has traditionally provided software licensing and related services around vendors such as Microsoft, Adobe, Symantec and McAfee, but chief executive Patrick Winter admitted the sector is at a turning point.

"The software industry is changing, and together with KKR, we see a unique opportunity to capitalise on those changes and continue to increase the value we bring to our customers, in particular in the areas of cloud and value-added services," Winter said.

Johannes Huth, head of KKR Europe, Middle East and Africa, added: "The partnership with SoftwareONE follows our strategy of investing behind strong European entrepreneurs and their teams to help them grow their businesses in international markets, in particular the US and Asia."

News of the investment comes after talk emerged in January that SoftwareONE is looking to triple its global headcount over the next three years, ahead of a possible IPO.

Stuart Fenton, who is currently chief executive of QuantiQ Technology but previously headed up EMEA and Asia-Pac for reseller giant Insight Enterprises, characterised SoftwareONE as a "medium-risk punt" by KKR.

All Microsoft LSPs are under pressure to move into adjacent areas such as cloud as the fees from vendors for selling licences continue to tumble, Fenton said.

"SoftwareONE, like all other LSPs [Microsoft licensing service providers], is on the brink of a massive change to its business model. The likes of Insight, Bytes, CDW, Softcat and Crayon are in my opinion likely to be more successful with that transformation as SoftwareOne is purely a paper [software licence] seller. That said, Patrick [Winter] is an extremely determined fellow and if anyone can make that transition from selling paper, it's him."

Cloud and services are a natural area of expansion for licensing specialists such as SoftwareONE, Angelo Di Ventura, ‎group sales and marketing director at Trustmarque Solutions, agreed.

"This doesn't surprise me given how the market is moving away from resale into services and I would expect all LSPs to have made, or be making those decisions," he said.

Headquartered in Stans, Switzerland, SoftwareONE claims to service more than 25,000 customers in 115 countries, partnering with 9,000 software publishers.

The deal, terms of which were undisclosed, is expected to close this Autumn.