License terms explained - IBM
Rick de Laat
International Business Machines (IBM) is one of the largest software vendors in the world and offers a wide range of products. This is partly due to acquisitions of other software vendors, such as Red Hat. Each software product has its own specific license metrics to measure its usage. This makes IBM licenses complex.
IBM Licenses
IBM licenses can be divided into three categories:
IBM’s licensing models are highly complex because of:
IBM Licenses
IBM licenses can be divided into three categories:
- Mainframe: Z-series systems often used for critical applications in large organizations. These licenses are generally complex and expensive.
- Distributed: servers and desktops in decentralized IT environments, including Windows and Linux. This is currently the standard for many organizations.
- Cloud: IBM offers various cloud-based licensing models, including IBM Cloud, Red Hat OpenShift, and SaaS services such as Watson and Bluemix.
IBM’s licensing models are highly complex because of:
- Number of products: IBM offers more than 18.000 products.
- License combinations: IBM has more than 32.000 different license variants (SKU numbers).
- Frequent changes: IBM regularly updates and modifies terms and products.
- License metrics: IBM has more than 250 different ways to measure software licenses and their usage.
- Acquisitions: IBM frequently acquires products and companies, which causes license terms to change.
Products
As mentioned, IBM offers more than 18.000 products, including software, hardware, cloud services, data analytics, AI, and more. The most popular IBM products are:
- SPSS Statistics: a platform for statistical analysis that uses machine learning and data analysis features. It allows organizations to analyze and interpret datasets.
- Watson Studio: an environment for developing, training, and managing AI models.
- Cognos Analytics on Cloud: a Watson co-pilot that helps organizations securely manage and analyze their data in the cloud.
- Maximo: an asset management suite with insights and tools for monitoring, managing, maintaining, and securing assets.
- Blueworks Live: a cloud-based tool for process modeling and workflow management.
- IBM Z (zSystems): a mainframe computer with security, AI, and cloud capabilities.
- IBM LinuxONE: a mainframe for Linux workloads, offering secure, scalable, and efficient solutions for cloud applications.
- IBM DS8900F: a storage system for mainframes and business-critical applications.
- IBM Z Hybrid Cloud Solutions: integrates IBM Z systems with hybrid cloud environments.
License Basics
IBM licenses consist of multiple layers of agreements and documentation:
Each product and version has an LI document containing the product name and number, use rights, restrictions, license metrics, and non-production use. Each version has unique licensing information, so for every product, the license details and terms & conditions can differ per version.
Because there are so many possible product combinations within IBM, each with unique license information, this chapter will only cover general guidelines and the most common licensing models and metrics. License information about specific products and versions can be found here.
- Base License Agreement (describes the core terms of what you purchase):
- International Program License Agreement (IPLA): contains the standard license and usage terms for most IBM software.
- License Information (LI) Document: contains product-specific terms, including usage rights and restrictions. Each product and version has a unique LI document.
- Commercial Agreement (describes how you purchase the software): these agreements contain purchasing terms such as terms & conditions, policies, Passport Advantage (see section 2.4), and sub-capacity licensing (see section 2.5).
- International Passport Advantage Agreement (IPAA): a license contract that allows organizations to purchase IBM licenses, subscriptions, and support under one agreement. Once registered with IPAA, you can purchase software licenses through IBM, a partner, or online via Passport Advantage.
- Enterprise License Agreement (ELA): an agreement for large organizations offering volume discounts, flexible license options, and long-term pricing arrangements.
Each product and version has an LI document containing the product name and number, use rights, restrictions, license metrics, and non-production use. Each version has unique licensing information, so for every product, the license details and terms & conditions can differ per version.
Because there are so many possible product combinations within IBM, each with unique license information, this chapter will only cover general guidelines and the most common licensing models and metrics. License information about specific products and versions can be found here.
License Metrics
IBM uses many different types of license metrics, depending on the type of software and infrastructure. The most common metrics are:
Processor Licenses
Processor Licenses
- PVU (Processor Value Unit): based on the processing power of the server where the software is installed. This metric is used for most server products.
- RVU (Resource Value Unit): similar to PVU, but based on the resources used rather than processing power. This can refer to specific hardware properties such as storage, network resources, devices, or cores.
- Virtual Processor Core (VPC): based on virtual cores. This applies to virtualized environments.
Example Calculation of PVU Licenses
A server with 4 processors, 8 cores per processor, and 100 PVUs per core results in a total of 3,200 PVUs (4 × 8 × 100).
See also the PVU calculator for reference.
A server with 4 processors, 8 cores per processor, and 100 PVUs per core results in a total of 3,200 PVUs (4 × 8 × 100).
See also the PVU calculator for reference.
User Licenses
- Authorized User: software license for a specific named user.
- Concurrent User: software license for a number of simultaneous users.
- Floating User: software license that can be shared within a network, as long as the number of active users does not exceed the limit.
- Licenses are rarely (or almost never) free;
- Less expensive IBM products often come with restrictions;
- Similar products generally share the same license metric;
- IBM products have no technical restrictions, making it easy to (unintentionally) become non-compliant.
Passport Advantage
IBM Passport Advantage is the primary platform for license management and includes the following sections:
- Software downloads: for insight into which software you are entitled to use and for requesting media.
- Purchase & renewal: for viewing and requesting quotes, purchasing new software licenses, and renewing subscriptions and support. This section also includes the PVU calculator.
- Reporting: for generating reports related to your account’s activities — such as order history, entitlements, migration history, and software download history.
- Entitlements: for viewing your current entitlements and Proof of Entitlement (PoE) certificates. A Proof of Entitlement certificate is a document IBM sends after purchase, listing the products and quantities you are authorized to use.
Sub-Capacity Licensing
IBM offers several licensing models, and sub-capacity licensing can lead to significant cost savings. Sub-capacity licensing means that organizations only pay for the virtual resources they actually use, instead of paying for the full physical server capacity.
Benefits and Risks of Sub-Capacity Licensing
Sub-capacity licensing can offer advantages, but there are also potential risks if not managed correctly. It allows organizations to better align license needs with actual usage, thereby saving costs. However, mistakes in implementation or reporting can lead to risks such as non-compliance and higher costs due to reverting to full-capacity licensing.
Advantages:
One of the key aspects of sub-capacity licensing is the term “active processors.” IBM considers a processor active when it is available for use, even if it is not actually being used. This means that if a processor in a virtual environment can be used, it must be licensed — even if it is not actively utilized.
Common Mistakes*
There are several common mistakes organizations make when managing sub-capacity licensing. These mistakes can lead to compliance issues and additional costs:
Benefits and Risks of Sub-Capacity Licensing
Sub-capacity licensing can offer advantages, but there are also potential risks if not managed correctly. It allows organizations to better align license needs with actual usage, thereby saving costs. However, mistakes in implementation or reporting can lead to risks such as non-compliance and higher costs due to reverting to full-capacity licensing.
Advantages:
- Lower licensing costs since organizations only pay for the cores in use rather than the total capacity of the underlying infrastructure.
- Greater flexibility as organizations can scale IT infrastructure up or down without immediately incurring additional license costs.
- Increased efficiency by making better use of existing hardware, for example, by consolidating virtual machines or moving workloads without extra licensing costs.
- Compliance issues due to incorrect reporting or failure to meet licensing criteria.
- Loss of sub-capacity rights due to incorrect configuration of tooling.
- Unlicensed systems caused by missing agents, which can lead to high audit costs.
One of the key aspects of sub-capacity licensing is the term “active processors.” IBM considers a processor active when it is available for use, even if it is not actually being used. This means that if a processor in a virtual environment can be used, it must be licensed — even if it is not actively utilized.
Common Mistakes*
There are several common mistakes organizations make when managing sub-capacity licensing. These mistakes can lead to compliance issues and additional costs:
- Incomplete reports: organizations are required to generate and retain quarterly ILMT audit snapshots for two years and share them with IBM upon request. Failure to provide such configuration reports may result in an inability to prove compliance, requiring a shift to full-capacity licensing.
- ILMT implementation: the IBM License Metric Tool (ILMT) must be properly implemented and maintained to meet reporting requirements. Organizations must install ILMT within 90 days after first using a sub-capacity product. It is important to apply regular updates and patches and ensure all machines involved in licensing are counted. Some products can also be managed using other tools if IBM approves them.
- Missing agents: if ILMT agents are not installed on all systems running IBM software, ILMT reports will be inaccurate and incomplete, leading to potential compliance issues. Systems without ILMT agents are counted under full-capacity licensing.
Would you like to learn more about the licensing terms of other software vendors as well? Read more via the links below!