Managing IBM Licenses Whitepaper

7/30/2019 Managing IBM Licenses Whitepaper

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Managing IBM

License Complexity



Managing IBM License Complexity

2


Many organizations use IBM software products to managecritical aspects of t heir business. In mid-sized to enterpriseorganizations, IBM products often represent a signicantportion of their overall software estate where licensing

needs to be carefully managed to opt imize spend.As one of the world’s largest software companies, IBMprovides thousands of products in its portfolio and uses avariety of license models, contract terms and conditions.These license models can be very complex, causing frequentconfusion for organizations trying to grasp the conceptswhile maintaining license compliance. Even wit hin IBM,there are experts who understand their software licensingpolicies, while the general population does not. In fact,the IBM sales team uses automated calculators todetermine software licensing as they put deals togetherfor their customers.

To understand IBM licensing, do you need to be amathemat ical genius like Albert Einstein? The answeris no. While at rst IBM licensing may seemincomprehensible, some education on t he license modelsand licensing scenarios will help minimize the confusion.In addition, a more automated approach to managinglicenses enables organizations to gain control,reduce ongoing software costs and minimize licenseliability risks.

ChallengesWhat are some of the challenges associated with IBMsoftware licensing? To begin, IBM installation media aredelivered with no constraint on the number of installations.

In other words, IBM customers can download softwarewithout restrict ions as there are no embedded softwarekeys preventing installations. As a result, in distributedenvironments, installations of software covered under thesame license may proliferate and bring an organizat ion outof compliance.

A second challenge is that IBM uses mult iple contractualdocuments to dene license entit lements and productuse rights. These documents include the IBM CustomerAgreement (ICA), Internat ional Product License Agreement(IPLA), Internat ional Passport Advantage Agreement(IPAA), License Information (LI) documents, and Software

Announcement Letters. Each of these documents carriestheir own set of terms and conditions which sometimescreates confusion on license rights. Some policies suchas backup and disaster recovery license rights are oftennot detailed in any of the above agreements, but aredescribed on the IBM website, which can change at anytime. It is important to monitor the IBM website regularly tomaintain awareness of any changes t hat will impact licensecompliance. When possible, organizations should captureimportant policies like these in their contracts to safeguard




against the risk of expensive changes. Many enterprisesnegotiate these potentially volatile policies as addendumsto the executed agreements so they only change throughbilateral agreement.

A third challenge is the variety of products and licensemodels. IBM products are grouped into t he followingcategories: Infrastructure Software, Operating Systems,Development Tools, Databases, Middleware andNetwork/Systems Management. The leading brands inthese categories are AIX, Websphere, DB2, Lotus, Tivoli,Rational and Cognos. The various license models include:Authorized User, User Value Units, Processor Value Units,and Resource Value Units. The wide variety of licensemodels makes it difcult for IBM customers to get t heirarms around the licensing.Another challenge for long-term IBM customers is thatthey tend to struggle with shelfware, or software theyhave purchased that is not being used but is sitting on the“shelf.” This is due to Enterprise License Agreements (ELAs)

they have signed with IBM, or mult i-year, “all you can eat”contracts that provide the end-user with access to numerousproducts and the ability to subst itute one for another.Often times IBM customers cannot nd a use for all thesoftware entitlements they have purchased, thus creatinga shelfware problem.

Finally, IBM frequently audits its customers and it isimportant for organizations to be prepared. Audits providea software vendor with the opportunity to uncover low-hanging fruit, or non-compliance situations t hat generate“easy” revenue. Recent industry analyst research indicatesthat IBM is among the top 10 companies most likely to

request an audit. IBM customers need to fully comprehendlicensing policies and know their actual state of deploymentand compliance prior to t he commencement of an audit.Doing so can eliminate or at least reduce t he probabilityof an audit before it happens.

IBM License ModelsLet’s examine the most common license models, whichIBM separates into 3 categories: User-based, Capacity-based and “other” licensing.

User-Based LicensingUser-based licensing is one of t he most common IBM licensetypes for both its desktop and server software and alignsto the number of unique individuals given access to anapplication. There are several classications:

Authorized User An Authorized User is dened by IBM as a unique persongiven access to an application. Much like other majorvendors with server based access, especially by thin orweb client, it can be very challenging to determine all theend-users that need a license.

Concurrent User A Concurrent User accesses an application at t he sametime as other users, up to the number of concurrent licensespurchased. Each Concurrent User may simultaneously accessthe software multiple times (i.e. using different ‘Installs’)under a single license. Typically, the software may beinstalled on any number of machines for use by those users.

Floating User Each Floating User may only access a single install of theprogram at any given t ime under a single license. TheFloating User can ‘oat’ around from one install to another.Like with Concurrent User licenses, typically there is norestriction on the number of times an application may beinstalled to support licensed users. An organization mightchoose the Floating User license type when the number of active users at any given time is a fraction of the numberof total users. Many Rational products, for example, offer achoice between Floating and Aut horized User.

User Value Unit (UVU)The number of users who have access to a specic softwareprogram are converted to t he required number of point-likeUVU entit lements per IBM’s UVU tables and methods, whichvary substant ially from product to product.

Capacity-Based LicensingCapacity-based licensing aligns to t he available hardwareresources (processor cores, memory, etc.) on the machineswhere a software program is installed or on the machinesthat the program manages. There are several types:

Processor Value Unit (PVU)

A processor, or central processing unit (CPU), is t he logiccircuitry that processes the basic instructions that drivea computer. IBM continues to dene a processor, for thepurpose of PVU-based licensing, to be each core on aprocessor chip. With PVU licensing, the required valueunits—which vary by processor technology (vendor,brand, type and model number) per the IBM PVU table,are calculated for each activated processor core that isavailable to the software program.

Server Based License An IBM server license is required for each server that isavailable to the software program, regardless of the numberof processor cores or partitions in the server or the numberof copies of the program on the server.

Virtual Server A virtual server is generally a virtual machine createdthrough either hard or soft partitioning, but can also be anunpartitioned physical server. An IBM virtual server licenseis required for each virtual server made available to thesoftware program, regardless of t he number of processorcores or installs on the server.




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PVU Full Capacity and Sub-capacity LicensingPVU Capacity-based licensing comes in two avors: Full-capacity and Sub-capacity (aka Virtualization capacity).For Full-capacity licensing, organizations must obtain PVUentit lements sufcient to cover all activated processor coresin the physical hardware environment where the softwareprogram is installed, including other partitions on a servereven if they are not also being used to run the application.Simply put, organizations must license t he full capacity of the physical server or group of servers. For Sub-capacitylicensing, organizations must obtain ent itlements sufcientto cover only t hose activated processor cores available tothe the specic virtual machine(s) or hardware partition(s)where that software is installed. IBM customers arelicensed for the lower of Full-capacity or Sub-capacity of anindividual server or cluster and IBM offers these options tohelp their customers drive down licensing costs.

One issue with Sub-capacity licensing is that it is easy tospiral out of compliance due to the movement of virtual

machines within and between server groups. Virtualenvironments tend to change frequently, making it criticalto track movement to maintain an understanding of the organization’s license posit ion and make licensingadjustments as necessary.

Generally speaking, many IBM products can be licensed asUser-based or Capacity-based. If the product has a servercomponent, it will commonly be licensed as Capacity-based

and if the product has only client components, then it willusually be User-based. Oftent imes, however, productscontain both server and client components and IBM givesorganizations the option to license some products eitherwith Capacity-based or User-based metrics.

Other LicensingIBM denes its third category of licensing as “other,”referencing Client Device and Resource Value Units (RVU).

Client Device A Client Device is essentially a single user computer. It mayalso feed data to another system, whether a traditionalserver or not, like an appliance, kiosk, or sensor. An IBMClient Device license is required for every Client Devicewhich runs, provides data to, uses services provided by, orotherwise accesses the software. .

Resource Value Units (RVU)This model is based on the number of units of a specic

resource (e.g. the amount of memory in t he system) usedor managed by the application. RVUs are counted ina tiered fashion much like UVUs, and the tiered RVUtables and counting methods vary just as much. WithRVU licensing, organizations can make changes in virtualenvironments with less impact on licensing than with thePVU model, since the RVU metric is not usually a funct ionof the hardware characteristics of the machine(s) where theapplication is installed and running, unlike PVUs.

For PVU the capacity of this server is usedas the metric

For RVU, the HW properties of t hese

managed servers impact the license

Applicat ionServer

ManagedServer

ManagedServer

ManagedServer

Applicat ionServer

ManagedServer

ManagedServer

ManagedServer

PVU vs. RVU License Models




1 250-5K 1.0 5K 5K 5K

2 5K-15K 0.5 10K 5K 10K

3 15K-50K 0.3 35K 10.5K 20.5K

4 50K-150K 0.2 7K 1.4K 21.9K

Tiers Users Factor Users in

Tier

Total UVUs

in Tier

Cumulative

UVUs

IBM Licensing ScenariosTo furt her illustrate IBM licensing calculations, let’sexamine examples of both User-based and PVUFull-capacity license models.

Example #1—UVUs:Your organization is designing a company intranet andrequires Tivoli Security to manage the authentication andauthorizat ion of users. How do you determine accuratelicensing for this application? The rst step is to identifyauthorized users. Then you need to separate them intointernal users as well as infrequent or external users.

As dened by IBM, infrequent users utilize their IDsless than ve times per year and the “chargeable”number of users is calculated at a ratio of 15:1. Let’ssay your organization consists of 50,000 internal usersand 105, 000 external users. Using the 15:1 ratiocalculation, external users become 7,000 chargeableusers (105,000/15). So, altogether, there are 57,000chargeable users in this example.

The next step is to calculate t he UVUs required using IBM’sUVU table. Each tier has a number of chargeable userswhich is multiplied by the respective factor.

UVU Calculation

Tier 1 (250-5K):5,000 chargeable users x 1.0 tier factor = 5,000 UVUs

Tier 2 (5K-15K):10,000 chargeable users x 0.5 tier factor = 5,000 UVUs

Tier 3 (15K-50K):35,000 chargeable users x 0.3 tier factor = 10,500 UVUs

Tier 4 (50K-150K):Only 7,000 chargeable users left x 0.2 tier factor = 1,400 UVUs

Total UVUs for 57,000 Chargeable Users:

5,000 UVUs (tier 1) + 5,000 UVUs (tier 2) + 10,500 UVUs (tier 3) + 1,400 UVUs (tier 4) =21,900 UVUs

Note however, t hat some products licensed by UVU do notfollow the example above. For example, InfoSphere ContentCollector requires the purchase of separate entit lementsfor Authorized, External and Employee UVUs. This is acommon theme in IBM licensing; there are many important

variations to the main licensing models that must be takeninto account. This is where a next generation licensemanagement tool, that has built-in knowledge of theselicense entitlement details, can really help organizationsgain control of complex license models.

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Example #2—PVUs:To execute the company intranet, your organization needsto run Websphere Application Server (WAS). When anemployee navigates to t he company intranet and clicks onthe link, this request is processed by WAS. In this scenario,how do you determine accurate licensing for WAS?

WAS can be licensed as either Full or Sub-capacity.With the Full-capacity model, you must acquire licensesfor all physical processor cores in the server where WASis installed.

Full Capacity Licensing

Server 1

MQ WAS

8 Physical Cores

Applicat ion

MQ

WAS

8

8

# of Coresto License

Suppose you are running WAS on an IBM PseriesPOWER770 and need to determine Full-capacity licensing.First, you determine the number of PVUs per core per IBM’sPVU table (see excerpt below). Let’s say t he POWER770 has

16 cores and there are 120 PVUs per core. To calculate thecost, multiply the number of cores by the number of PVUsand the cost per PVU, as follows:

# of Cores # of PVUs Cost per PVU

16 120 $49

IBM Full-capacity Licensing Example

Calculation: 16 cores x 120 PVUs per core x $49 per PVU = $94,080




If you are using server virtualizat ion technology and havevirtual machines or hardware partitions, then Sub-capacitylicensing can be more cost effective. In this scenario, youwould license WAS for the number of virtual cores that

are allocated to the virtual machine or hardware partitionrunning the WAS software, as shown in the graphic on thenext column.

770, 780, 795 > 4 All 120

750, 755, 4 All 100

PS704

PS700-703, 2 All 70

710-740

Processor Technologies

Processor Brand Processor Type

Cores per socket PVUsper

Core

Processor Vendor

ProcessorName

Servermodel

numbers

Maximumnumber of

socketsper server

1

6 - C or e ( 1 6 )

O

c t i - C or e ( 8 )

H

ex a- C or e ( 6 )

Q

u a d C or e ( 4 )

D

u al - C or e ( 2 )

O

n e- C or e ( 1 )

I F L E

n gi n e

Proc.Model

Number

POWER7 4IBM

PVU Table Excerpt

Sub-Capacity Licensing

Server 1

PAR 1MQ

WAS

4 Virtual Cores 4 Virtual Cores

PAR 2MQ

8 Physical Cores

Applicat ion

MQ

WAS

4+4 = 8

4

# of Coresto License

PVU licensing requirements can uctuate as virtualmachines and other sub-capacity technologies dynamicallyadjust to use more or different processor cores undercertain conditions. IBM tends to take the high watermark and license for the upper level, asking ‘what is thehighest number of PVUs required for this product at anypoint in t ime.’

As you can see, each licensing example resembles a mathword problem or brain teaser from our former school days.They rst require an understanding of the problem, how toapply the license model, followed by the actual calculationto arrive at the solution.

IBM Sub-capacity Licensing Example




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ILMT Connector

• Auto-create Licenses•Link all application versions (from ARL)

• Full hardware•Full software•LPARs & Pools

.ndl

Server

Virtual Host

LPAR LPARLPAR

ILMT Inventory • Software

•Limited hardware•Sub-capacity calculat ions

ILMT

FlexNet Manager and ILMT Integration

IBM License Metric ToolTo assist with managing Full and Sub-capacity licensingterms, IBM provides the IBM License Metric Tool (ILMT)which is recommended for IBM Passport Advantagecustomers that are using Full-capacity licensing andmandatory for Sub-capacity PVU licensing in environmentsof more than 1,000 employees that are not using TivoliAsset Discovery for Distributed (TAD4d) . Customers arerequired to generate quarterly ILMT reports and keep themfor a period of two years. These reports must be provided if IBM conducts an audit.

If organizations are using ILMT, what else do they need?Simply put, ILMT is a no-charge tool that helps maintain acontinuously updated inventory of t he computers where IBMPassport Advantage PVU-based software assets are installedon a network. It is not a license management solutionbecause it does none of the following:

(a) Optimize license consumption based on entitlements, or

help reduce software spend,

(b) Inventory or manage the multitude of non-PVU-licensedIBM software products or other software vendors’products, and

(c) Manage or report on contracts, users and paymentschedules. A complete, optimized software licensemanagement solution does all of these things across awide range of software publishers, license models andagreements, for hundreds of thousands of applications.

However, opt imized license management solut ions arenot standalone systems. Ideally, these solutions leverageexisting tools and infrastructure to collect the data requiredto manage the software estate. They should be able toimport inventory data from sources such as ILMT andconnect to procurement systems for purchase order data, HRsystems and/or Active Directory for user and organizationaldata, and other systems for contract and nancialinformation. ILMT and other inventory tools are necessarybut insufcient to enable organizations to implement anoptimized license management program that can helpreduce software license and maintenance costs whilemaintaining continuous license compliance.

Introducing FlexNet Manager for IBMThere is a solution t hat automates IBM license managementand helps organizations handle its complexity. FlexNetManager for IBM enables the reduction of license,maintenance and audit costs for IBM desktop and serversoftware while maintaining license compliance.




Key FeaturesFlexNet Manager for IBM is built on the FlexNet ManagerPlatform which is a state-of-the-art discovery, inventory andlicense management solution covering more than 100,000applications from 11,000 vendors. FlexNet Managerfor IBM automates purchased versus installed licensereconciliation of IBM applicat ions, including Cognos,DB2, Lotus Notes, Tivoli Workow Scheduler, WebSphereApplication Server (WAS), and many more. Its Product UseRights Library for IBM includes entitlement information tooptimize IBM license management.

FlexNet Manager for IBM currently handles the followingIBM license types: PVU, Authorized User, Float ing User,User Value Unit (UVU), Resource Value Unit (RVU), andConcurrent User. It can use ILMT as an inventory sourceto provide information on hardware allocations to virtualmachines and hardware partitions, as well as detailedsub-capacity consumpt ion gures for PVU-based licenses.It supports both Full and Sub-capacity PVU licensing as

described above.

The FlexNet Manager for IBM License Simulation tool allowsfor ‘what if’ analysis to see the impact of changes to t he ITenvironment on an organization’s IBM license posit ion. Forexample, it shows how sub-capacity license requirementswill change when applications or virtual machines aremoved from server to server. This industry rst capabilityallows organizations to proactively assess changes toreduce licensing cost and compliance risk.

Key BeneftsFlexNet Manager for IBM helps organizations gain control

of IBM software assets by automating license management,reducing license liability risk, controlling license andmaintenance costs, and managing IBM license complexity.Here are the major benets:

Improved negotiations with IBM — Negotiate softwarecontracts with detailed knowledge of the organization’s IBMlicense position, application usage and payments. Betterplan purchases and upgrades to maximize discounts.

Reduced license costs — Apply product use rights tominimize license consumption and reduce true-up costs.Automatically recycle unused licenses in the environment

to defer new license purchases. Buy only t he licenses that you need.

Reduced maintenance costs — Optimize maintenancepayments based on actual software usage, where possible.Ensure that the organization is not over-spending onthe multi-million dollar maintenance contracts that areassociated with high-value software licenses.

Reduced risks — Minimize the risk of an IBM software audit,unbudgeted true-up fees, penalties, litigation and branddamage, by ensuring proper licensing of all software in use.

Rapid ROI — Leverage existing IT systems as part of atotal FlexNet Manager Suite solution. FlexNet Managerfor IBM provides rapid t ime to value by quickly ndingsoftware cost savings.

In summary, gain control of IBM license complexityby understanding the license models, communicat inglicense terms and conditions to key stakeholdersthroughout the organization, and be aware that virtualenvironments need to be carefully monitored to managelicense compliance risk. Finally, utilize solutions such asFlexNet Manager for IBM to automate and opt imize IBMsoftware license management.

About Flexera SoftwareFlexera Software is the leading provider of strategic

solutions for Application Usage Management; solutionsdelivering continuous compliance, optimized usage andmaximized value to application producers and theircustomers. Flexera Software is trusted by more t han80,000 customers that depend on our comprehensivesolutions- from installation and licensing, entitlementand compliance management to application readiness and enterprise license optimization - to strategicallymanage application usage and achieve breakthroughresults realized only through the systems-level approachwe provide. For more information, please go to:www.exerasoftware.com

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