IBM Software Licensing: Tips to Safeguard Your Bottom Line

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.

Q: Is IBM still renewing PVU based Consumer licenses (consumer is a term from when they had 14 levels of licensing)?
A: Yes, the PVU Consumer license can be renewed. IBM made some considerable license changes in July 2014 and subsequently deprecated the BI Consumer role. IBM also converted this license to Analytics User PVU at the time of the next annual software S&S renewal.

Q: Is there a difference in the SDK that’s included with the Admin licenses role and the standalone Cognos Analytics SDK?
A: No, there is no difference between the SDK that is included with the Admin license and the standalone SDK license. As of July 2014, IBM increased the access rights for the Admin license to include the SDK. Therefore, if the SDK license is being leveraged by a user that also has Admin license, then support for the standalone SDK can be dropped at the time of the next annual software S&S renewal.

Q: Can Cognos Analytics be deployed using a PVU model?
A: Some products such as Cognos Analytics can be licensed on the authorized user metric, the PVU metric or a combination thereof. Other products such as SPSS Server, TM1 or Planning Analytics require the use of PVU-based licenses with the exception of some enterprise bundles that are far more expensive for the user licenses.

Q: We have multiple PAX sites – can those be easily consolidated into a single renewal?
A: Yes, Senturus can help you migrate from PAX to single PA site with some basic paperwork, which we recommend 4-6 weeks prior to the next renewal date.

Q: Is a separate license required for non-production environments?
A: A separate non-production license is NOT required for customers that are only licensed on the Authorized user metric. IBM permits a “reasonable number of non-production environments,” such as development, test and QC as long as the total number of users in the non-production environments does not exceed the total number of user licenses acquired for production. However, any PVU-based deployment requires a separate PVU license for non-production, which has a different IBM part number and is generally 50% less than the cost of the PVU license for production.

Q: When do you suggest PVU over Authorized User licenses?
A: It really depends on how users will interact with the system, but in most scenarios the PVU metric will be advantageous for deployments of more than a few hundred users.

• 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 sub-capacity licensing requirements
  • Requires use an eligible
  • Sub-capacity product: http://public.dhe.ibm.com/software/passportadvantage/SubCapacity/Sub_Capacity_Eligible_Programs.pdf
  • Virtualization technology: http://public.dhe.ibm.com/software/passportadvantage/SubCapacity/Eligible_Virtualization_Technology.pdf
  • Processor: http://public.dhe.ibm.com/software/passportadvantage/SubCapacity/Eligible_Processor_Technology.pdf
  • Mandatory installation of the IBM License Metric Tool (ILMT) within 90 days of deployment: https://www-01.ibm.com/software/passportadvantage/ibmlicensemetrictool.html
    • Exceptions:
      • Less than 1000 employees
      • Licensed at full capacity

• 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.