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5 Secrets to Crack the IBM Licensing Puzzle

Managing IBM licenses is complicated, especially in the server environment. IBM software has many different license types and calculation methods such as full capacity and sub-capacity for PVU. In addition, IBM also uses more complex license metrics like UVU and RVU. In fact, using a mixture of hardware and software, the company has over 900 metrics to closely track your usage.


So, where do you begin when approaching an IBM Software Asset Management (SAM) program?
Over the years, I’ve developed these 5 secrets that will help you tackle this beast of a vendor. Understanding these SAM tips, will put you a step ahead of the game. You’ll improve your ability to analyse the cost effectiveness of various IBM license models, and perhaps most importantly, optimize IBM license costs within the datacentre.

#1. The scoop on sub-capacity

IBM customers are increasingly aware of the term “sub-capacity.” But many invite risk by misunderstanding it as “I only need to licence the virtual CPUs used for each IBM application.” Here’s the real scoop: Rather than licencing for point-in-time, IBM will charge you for the accumulated peak virtual capacity for each software product used over the last two years.

#2. ILMT still rules sub-capacity

The successful deployment, configuration and reporting of IBM’s Licence Metric Tool (ILMT) is compulsory for sub-capacity licensing. Customers who fail to meet this requirement are liable for full capacity licensing, which typically costs 5 times more. There are rumours that IBM may recognise 3rd party reporting in the future. For now, unless you meet strict criteria to remove ILMT from your contract, that tool is still the rule.

#3. Mainframes are a hotspot

A little-known truth is that IBM mainframes are a compliance hotspot where things can easily go wrong. Although z Systems come with a built-in SCRT sub-capacity reporting tool, roughly 25% of applications deployed on System z can’t be captured by SCRT. The sub-capacity and Sysplex eligibility ‘traps’ are risky areas that mainframe customers often overlook. Be proactive and don’t let the heat build.

#4. Servers aren’t one size fits all

Each IBM product has a different licence requirement on non-production servers. Some are free, some require full licences, and some require a fixed, reduced licensing fee. There are also strict rules regarding licensing hot, warm and cold standby servers. Remember, there isn’t a one-size-fit-all solution, and each server licensing scenario should be solved individually.

#5 PVU isn’t your only concern

Many projects place a heavy focus on IBM products sold on a Processor Value Unit (PVU) license. Yet they ignore the risk associated with IBM products sold under other models, which is the majority of IBM’s portfolio.

Software licensed under non-PVU metrics is typically harder to track, but contributes to roughly 40% of all compliance exposures. Pay close attention to models such as role-based Authorised Users, Authorised/Employee/External User Value Units (UVUs), and Resource Value Units (RVUs).

USU License Management offers a solution which fully supports IBM LPARS, clustering, and software and hardware partitions. SmartTrack is a web-based solution designed to precisely manage your IBM licenses, and specializates in the needs of large and complex organizations. This technology gives you the power to:

  • Automatically calculate how many licenses you need for over 100 IBM metrics, which cover 9,400 IBM products right out of the box
  • Know and follow the product use rights (PUR) along with the metrics, using field-tested tools which ensure you don’t over-deploy
  • Consolidate into one system all of your Passport Advantage Agreement records with license purchases made outside of PPA


Want to learn more key tips that crack the secrets of IBM licensing? Let’s start the conversation! Our expert team is ready to help you fit the many facets of your IBM licensing puzzle together.

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Eric Chiu

Eric Chiu

As a veteran of software license compliance, Eric Chiu has experience developing and managing software license compliance programs for many of the top 10 software vendors and has led hundreds of enterprise-level license audits on their behalf. In recent years, his focus has been on advising companies on strategic and tactical issues in setting up and operating software asset management (SAM), and he has provided services to a wide range of clients, from SMBs to large enterprises.

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