IBM licensing overview part 3
IBM license baselines, remedial actions & audits
As I have highlighted in my previous posts, the topic of IBM licensing can be confusing with the potential for significant waste in software spend and unbudgeted fines for non-compliance.
If you are new to IBM licensing or have a complex IBM software license estate, understanding where to start to reduce the complexity or cost may cause a delay in resolving the concern, potentially compounding the financial impact.
As an IBM license consultant and expert in IBM cost and risk optimisation, my blog series provides an overview of the following introductory topics;
• IBM software entitlements and subscriptions
• IBM software usage
• IBM license baselines, remedial actions and audits.
In my previous posts, part I covered software entitlement and subscriptions with part II focusing on software usage. This post will provide an overview of IBM software licensing positions, remedial actions and license audits.
IBM license baselines, remedial actions & audits
IBM baselines
We would always advise customers to establish their license baseline well in advance of an audit to allow themselves ‘space’ to ensure they are most favourably placed.
A professional license baseline will show you what you have rights to use, how much you have used from this and if you have financial exposures or wastage, and finally what you can do about these issues before an audit happens and before you find yourself with no space to act on very costly issues
Remedial actions
It is useful to know what your license exposure and wastage is, but it is even more important to know what you can do to remediate these issues.
You may think that remedial actions are as straightforward as either decommissioning software or buying more, but this is far from the case.
With the right advice, you can use IBM’s complex rules to your advantage and can frequently reduce your exposures simply through better bundling and excluding software installations in ILMT. You can do the same to free up licenses for reuse elsewhere avoiding unnecessary spend. Our cross-industry experience can help you explore policies and contract clauses which might be of financial benefit.
Leveraging IBM’s complex rules to your advantage and exploring policies and contract clauses you might not be aware of can have a huge impact on your bottom line if fully understood while minimising the disruption to your IT function.
IBM Audits
The prospect of an IBM license audit should always be at the front of your mind. Undergoing an audit can be detrimental to organisations in terms of monopolising people’s valuable time (and even impacting mental health), in terms of unanticipated financial costs (which can often reach millions of dollars) and in terms of reputational risk as a result of any discovered non-compliance.
Auditing can take any of the 3 forms listed below.
- IBM Software License Reviews
IBM outsource their software audits (Software License Reviews) to KPMG, Ernst & Young and Deloitte who will analyse your estate and, amongst other things, poke holes in your ILMT coverage and assert that you need to license whole servers for IBM software.
Ideally, you will have taken advice on your IBM licensing baseline before you undertake or are engaged in any of the audit activities below.
2. IBM Approved SAM Provider Programme (IASP)
IBM introduced the IASP programme in 2019 and customers are given a number of concessions (outlined below) if they contract paid engagements with IBM’s auditors or Anglepoint to ensure that they are correctly licensed.
We encourage you to make a considered and informed decision whether this programme is appropriate for your organisation.
Customers using an IASP are exempt from a formal IBM audit but notably the findings of the IASP are shared with IBM.
We recommend you consider whether you are comfortable with IBM having access to your IBM licensing records while you are in the IASP (and afterwards).
In relation to the IASP programme, IBM say ‘If there is a license shortfall IBM will not seek the standard back S&S fees for up to two years which are normally required in a compliance context: this can result in a saving of up to 40% of the license fees’
We recommend you consider whether you have any exposures which might be backdated and thus whether this concession is an advantage to you.
In relation to the IASP programme, IBM say ‘If the products are properly reported on a Virtualization Capacity or Container Licensing basis in the baseline report, IBM will not pursue any shortfalls which might have been due through past failures to monitor and report Virtualization Capacity or Container licensing.’
We recommend you consider whether you have any issues in complying with IBM’s sub-capacity rules which might be pursued and whether this concession is an advantage to you.
3. Self-declaration
Whether you have signed a contract with IBM or ordered software through a reseller, you will have contractual obligations to declare your IBM software licensing position if you use software measured by the PVU, RVU MAPC or VPC metric which may take the form of issuing ILMT data every quarter.
This is an involved process with a significant learning curve.
If I could give you one piece of advice…
We cannot recommend strongly enough ensuring that you fully understand what your data is telling IBM before you issue it. Once the data is provided to IBM or one of its auditors/IASP partners, the ship has sailed.
In summary
As my series of posts will have highlighted, understanding and managing your IBM license estate to avoid unbudgeted spending, waste and risk of non-compliance is complex and requires a deep understanding of IBM’s licensing policies and terms. This introductory series of posts has covered software entitlements and subscriptions, software usage and license baselines, remedial actions and audits and should serve to highlight the typical IBM licensing concerns, challenges and key areas to be aware of to manage cost and reduce risk and complexity.
If you wish to read further into this subject matter you should look at other materials we have produced such as the blog on ILMT and the IBM License Service and the website page on IBM audit defence.
For more information
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 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 or contact us.
Please follow the link to read more on our IBM License Optimisation services.
About the Author:
Kevin Barnes is an IBM SAM Consultant here at Version 1.
