Many of our projects involve the identification and valuation of a client’s full range of information technology portfolio, all of which is classified as intangible assets and/or intellectual property. Too often we find that in mergers, bankruptcies, reorganizations, or other deal-structured environments, the IT portfolio and its potential value are overlooked. There are multiple elements of an IT portfolio, including the following:
- Enterprise solutions
- Custom applications
- Data warehouses
- Master licenses
- Source code
- Databases
- Data mining
- Domain names/URLs
- E-Commerce sites
- Third-party software tools
- Credit/payment systems
Computer software and other information technology-based assets pose unique valuation challenges. One reason is because of their chameleon nature; these assets can be protected by patents, trademarks, copyrights, even trade secrets -- or any combination of these different categories of IP. Additionally, assets like software, particularly application software, have one value in place as being used by a company, and/or an entirely different and much lower value should the assets be sold, transferred or liquidated. For that reason, true market value is the toughest to identify for software.
As with other types of assets, individual technology assets rarely travel alone. For example, a domain name would rarely be valued without considering associated assets, such as website architecture or trademarked terms within the name. Because of these and other challenges, qualified professionals with true expertise should be used to identify and value the different elements that comprise the IT bundle.
