What is a Carve-Out – and Why Does It Affect License Management?

A carve-out refers to the separation of a part of a company into a legally independent entity. In this process, all existing software contracts must be reviewed, adjusted, or renegotiated. Without a clear licensing strategy, companies risk:

Operational restrictions
System outages
Breaches of contract with substantial financial penalties

The challenge: the new entity must become fully operational within just a few weeks – legally compliant and technically stable.

License Risks: When 100 Licenses Suddenly Aren’t Enough

How quickly license violations can occur is illustrated by this example:

A company owns 100 software licenses. These are intended to be transferred to the new spin-off. The licensor agrees – problem solved? Unfortunately, no. The license model is not based on the number of users but on the number of processor cores used. After the migration, the software runs on a more powerful infrastructure with 1,000 cores. The result: 900 licenses are missing – potentially leading to millions in penalties.

softvelop’s Approach: Navigating the License Jungle with a System

To avoid such risks, softvelop implemented a strategic risk management approach and developed a tailored licensing strategy based on Transition Service Agreements (TSAs). These agreements enable companies to continue using software legally even after the official carve-out, while new licensing contracts are negotiated and IT infrastructures are built.

Core Tasks in the Project:

Creating a comprehensive inventory of software and licenses
Prioritizing software vendors based on urgency
Analyzing and evaluating license agreements
Communicating with manufacturers and licensors
Establishing TSA agreements to ensure operational continuity
Ongoing coordination with internal stakeholders

Successful Carve-Out: Secure, Fast, Compliant

Thanks to softvelop’s structured approach, the carve-out was executed successfully – without system failures or license violations. Precise communication with hundreds of software vendors and well-crafted transition solutions were key to the project’s success.

What Does This Mean for Your Company?

Are you planning a carve-out or facing a similar challenge in IT procurement? softvelop is your reliable partner for:

License management during organizational transitions
Contract negotiations with software vendors
Transition Service Agreements (TSAs) and IT compliance

Let’s analyze your needs together – non-binding, specific, and solution-oriented.

Contact us now for a consultation!

back