Q&A - Would we own the hardware, software and systems of a bespoke IT package?

Q: My business is going so well that after just two years we are expanding and moving to new premises in two different locations. We are also investing in a new, linked computer system which will be supplied and maintained by an IT consultancy. The guarantees and ownership of our current off-the-shelf machines were straightforward but as we will be purchasing hardware, software and a bespoke system this time, can you clarify that we will own everything?

A: Just like any other business equipment, computer hardware is a tangible asset owned by the business, provided of course that you purchase it outright rather than leasing it. The hardware should come with a guarantee and if it is being maintained by your IT consultants they should give you a maintenance contract.

Even though you may also receive your software in a tangible form, such as CD, it will be coded and that code will be covered by copyright law and be the intellectual property of the person or company who wrote it. So whilst you may purchase the software outright, you must also purchase a licence to use it in accordance with the terms and conditions applied by the owner of the copyright.

In the case of any bespoke software you commission you need to ensure that you have a contract specifying that you are the owner. If your ownership of it is not clearly laid out you will not be able to make any changes without the permission of the original software developer and it is likely that you will need to engage their services to make the changes. This could be a problem if in the future you decide you want to change to a different IT consultancy.

Before entering into any contracts it would be wise to seek legal advice from a solicitor.