24% price increase for IBM software and how Version 1 can help
IBM announced some eye-watering price increases over the past few days.
As an IBM license consultant and expert in IBM cost and risk optimisation, I felt compelled to write a quick blog on this and share with you how Version 1 can help.
24% price increase for IBM Distributed Software transacted in key currencies from January 2023
IBM announced on 22nd November 2022, that “due to unique local market dynamics in select countries” there will be a 24% increase in pricing from January 2023 for All Passport Advantage Eligible Perpetual, Subscription License, Monthly License, Fixed Term Licenses, Appliances, and SaaS Products transacted in the following currencies:
- British Pound
- Euro
- Japanese Yen
- South African Rand
- Swedish Krona
- Norwegian Krone
- Danish Krone
Where transactions are in the Canadian dollar there will be a 19% increase in price.
This message clearly states “For the currencies and countries included in this announcement, these price increases supersede the price changes previously announced in September 2022.”
This is triple the 8% price increase announced for the UK, Eurozone, and South Africa in September this year.
Do you have price protection in your contract?
Firstly, we recommend you check your contracts for any price protection you may have. If you have negotiated a contract with IBM, you may have a clause which guarantees prices will only increase by a much smaller amount year on year.
If you do not have price protection or have signed up to standard IBM terms and conditions, please read on.
No price protection, do not panic!
It is notable that this announcement comes close to IBM’s year-end and could be a negotiating tactic to get customers to sign on the dotted line before their year-end and potentially sign up for a longer term.
We urge you to consider the following before rushing into a deal.
First, can you, hand on heart, say you know your licensing position?
Do not perpetuate a waste of money
Do you know whether you are wasting money on maintenance for products you do not need? If so, consider that by rushing into an agreement you are just perpetuating this waste.
And when IBM ask if you want to sign up for a 3-year deal to get an 8% increase for 2 or 3 years, ask yourself if you really want to perpetuate this waste for another 2 or, even 3 years.
Do not lose your negotiating position
You may also be in a position where you are using more IBM software than you have rights too.
In most cases, we find customers are doing a mixture of both over-licensing some products and under-licensing others.
We urge you to establish your actual licensing position as well as your future demand and negotiate the complete position together to get the best deal for yourself.
Version 1 can help
As IBM license experts, we are deeply familiar with a wide range of license considerations and are happy to help with any license queries you may have.
We are offering a complimentary licensing advisory session to understand any license concerns or projects that may impact your compliance position and to advise on the best way forward.
Alternatively, we can take a look at your ILMT Audit Snapshot and provide a recommendation as to how you might carry out exclusions or classifications and an indication of how much this might save you in financial terms.
To arrange one of these sessions, please go to our website, contact us or contact me directly via LinkedIn.
I will also be issuing a series of blogs over the next few weeks giving a high-level overview of IBM Licensing and also covering the IBM License Metric Tool (ILMT) and the IBM License Service.
Please follow the link to read more on our IBM License Optimisation services.
About the author
Kevin Barnes is an IBM SAM Consultant at Version 1.
