IBM Software Licensing: Tips to Safeguard Your Bottom Line


IBM Software Licensing: Tips to Safeguard Your Bottom Line

July 17, 2018

Deployments & Performance Optimizations, Security, Governance & System Admin

Save Money, Reduce Risk and Maintain Compliance

Having a solid understanding and staying on top of the IBM evolving license structures and maintenance agreements can mitigate risk and have a serious impact on the bottom line. IBM aggressively audits its software customers—being caught out of compliance results in settlement for license entitlement delta plus two years of retroactive S&S fees. There’s even more savings to be had by understanding your way around IBM’s pricing and licensing models.

In this webinar recording we share great tips to save money and maintain compliance of IBM analytics software licensing. You will learn

  • How to optimize your investment and contain costs
  • Software Subscription & Support (S&S) renewal gotchas
  • How to maintain compliance and prepare for an audit

You may also be interested in our individualized complimentary IBM analytics software licensing review.


IBM Cognos


Carson Bradshaw
Director of Client Solutions
Senturus, Inc.

Carson is an 18-year business analytics veteran who has spent formative time working for Cognos and various IBM business partners and resellers. In addition to numerous technical certifications from leading enterprise BI software companies, he holds sales certifications from IBM for Cognos, TM1, SPSS and more.

  • IBM license types
    • Fixed term and indefinite
    • Cloud (SaaS)
    • Hybrid cloud
  • License considerations – on-premise vs. cloud
    • Product limitations
    • Technical aspects
    • Financial aspects
  • IBM user and capacity based licensing
    • User-based licensing
      • Authorized user (named user)
      • Concurrent user
    • Capacity-based licensing
      • Processor Value Unit (PVU): measured by processor cores
      • Resource Value Unit (RVU): measured by a specific resource
    • IBM Processor Value Unit (PVU)-based licensing
    • IBM PVU calculator for sub-capacity
      • Two key factors for determining PVU license requirements
        • Type of processor technology
        • Number of processor cores
      • IBM PVU table specifies the # of units, based on the processor technology, which is then multiplied by the # of cores available to software product
        • Ex: 100 units X 8 cores = 800
  • IBM software subscription and support renewals
    • All IBM software products include first year of IBM Software Subscription & Support (S&S)
    • Fixed-term licenses must be renewed for continued usage
    • SaaS license subscriptions are elective
    • Perpetual license renewals are elective
      • License reinstatements are required for lapsed renewals
  • IBM software renewal gotchas
    • Cloud/SaaS automatic renewals
      • Must cancel 90 days in advance
    • YoY uplift policy
    • License reduction policy
  • Passport Advantage
    • Passport Advantage is relationship based
    • Passport Advantage Express is transaction based
  • IBM license information documents
    • Search LI documents provides portal to access IBM announcements for individual programs (Ex: Cognos Analytics)
    • These programs and supporting programs are key to understanding the specific access rights for the various license types
    • In this example for Cognos Analytics, there is a hierarchy with respect to access rights, which is common
  • IBM Software License Matrix Example
  • IBM Software Audit/Compliance Review
    • IBM informs customer of compliance review via Audit Announcement Letter (AAL)
    • Audit kickoff may be with IBM, but more likely third party independent auditor partners (e.g. Deloitte & KPMG)
    • Deployments are collected in an IBM Server workbook (ISW) and IBM entitlements are collated in the Effective License Position (ELP) and matched to deployments to create the License Compliance Table (LCT)
    • IBM provides distribution results summary, which details the S&S owned, license requirements and license discrepancy
    • IBM submits Settlement Summary and expects PO for the final settlement quote within 30 days
    • IBM issues audit relief
  • How to Avoid/Prepare for IBM Audit
    • Maintain list of all IBM agreements (e.g. ELA, IULA, STA, etc.) and Proof of Entitlements (PoE) documents, especially those with special terms
    • Keep IBM contact information up-to-date via IBM (PAO) to confirm receipt of renewal quotes and PoEs as well as license changes, updates to agreements and other important notifications
    • Limit software acquisitions to smaller group that is aware of licensing implications and educate user community accordingly
    • Develop Software Asset Management (SAM) process to effectively manage IBM software entitlements compared to actual use
    • Restrict Authorized User licenses based on current access rights
    • Verify sub-capacity eligibility requirements and deploy ILMT ASAP
    • Acquire non-production licensing for any PVU based deployment
    • Perform self-audit to promote preparedness
  • Tips
    • PVU licenses do not limit the number of users but are restricted by processors.
    • Full-capacity licensing requires license for every processor core of the physical server, but sub-capacity licensing allows licensing of fewer cores through the use of eligible virtualization technology.
    • Reduction of processor cores available to the IBM product can substantially reduce the expenditure. However, there are caveats.
    • Customers are out of compliance if they do not deploy the ILMT within 90 days, submit quarterly reports and retain reports for 2 years.
    • Senturus has secured discounts for our clients by leveraging our channel margin as IBM reseller to yield savings off the price from IBM.
    • Right-sizing IBM software renewal(s) can substantially reduce the expenditure.
    • PA provides automatic co-termination of license renewals (vs. multiple sites for PAX).
    • Licensing documents contain terms of use, including prohibited uses, license restrictions and limitations, etc.
    • IBM requires customers to impose user access limitations for many software programs, which is one of the keys to maintaining compliance.
    • If a customer out of compliance, IBM asks them to buy the right licenses and pay two years of retroactive S&S fees.