IBM Licensing Quick Guide

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Introduction

IBM is one of the largest software vendors in the world – some rankings even list it as the largest software vendor. However, IBM licensing rules and policies are not as well-known as that of some other software vendors. One reason for this is that IBM has a broad portfolio of software which is continually expanding, and each product has different licensing rules and methods of measuring deployment. This guide aims at providing a quick overview of licensing topics which apply to most IBM software products.

IBM brands

IBM groups its software offerings in five general “brands”:

• DB2 and Information Management: This brand is mostly known for its DB2 database products such as DB2 Enterprise Edition. Other products in this brand focus on areas such as data warehousing, data analysis, data mining, media asset management, enterprise content management and information integration.  Acquisitions which have been added to this brand include Informix (2001), Ascential (2005), FileNet (2006), and Cognos (2008).
• Lotus: Besides the well-known Lotus Notes/Domino email software, this brand covers products which are aimed at providing a unified environment for messaging, calendaring, application development, real-time and team collaboration, content management, mobile and wireless devices, and social networking. Lotus Software was acquired by IBM in 1995.
• Tivoli: The products in this brand focus on infrastructure management. Examples of commonly used products are Tivoli Storage Manager (for data backup and restore) and Tivoli Monitoring (for monitoring performance and availability of servers and applications). Tivoli Systems was acquired by IBM in 1997. Recent acquisitions which were added to this brand are Candle (2004), Micromuse (2006), and MRO (2006).
• Rational: This brand groups most IBM software relating to software development and delivery. Rational itself was acquired by IBM in 2003 and expanded through the acquisition of Telelogic in 2008.
• WebSphere: Product families within this brand are application servers, business integration, commerce, development tools, and portals. Commonly used products are WebSphere Application Server and WebSphere MQ (middleware).

IBM frequently expands its portfolio through product development and acquisitions of software companies. An overview of the most common IBM products within each brand can be found here. In some cases, IBM changes the licensing rules of the acquired company to align with the existing IBM rules. In other cases, IBM chooses to maintain some of the license metrics of the acquired company (Maximo and Cognos are examples).

Passport Advantage

The programs through which IBM offers its software licenses are called Passport Advantage (for larger organizations) and Passport Advantage Express (from small to midsized organizations). Passport Advantage Express has no minimum purchase requirement and its offerings are priced per transaction – no discount applies for volume licensing.  Passport Advantage, on the other hand, applies a points-based system to calculate volume discount. Based on the number of purchases a customer makes each year, a Relationship Suggested Volume Price (RVSP)-Level is assigned, with a corresponding discount level. Large organizations are wise to consolidate their IBM license contracts as much as possible to benefit from these volume discounts.

In most cases, IBM software licenses allow the customer to use the software indefinitely, although fixed-term licenses are also available. Once a license has been purchased, the customer is required to buy software subscription and support annually in order to benefit from software updates and technical support. The initial purchase of a software license generally includes subscription and support for the first year. Using your Passport Advantage user ID and password, it is possible to obtain an overview of your software entitlements through the IBM website.

Capacity based license metrics

The Processor Value Unit (PVU) license metric is the most common license type for IBM server products. The advent of multi-core processors and increasingly powerful hardware technologies lead IBM to introduce this license metric in 2006. Previously, licenses were calculated “per processor”. As performance of processor technologies began to differentiate, IBM adapted their licensing policy accordingly.

The PVU license metric is meant to align license requirements with hardware performance. For example, a dual-core POWER5 chip requires double the amount of PVUs as a dual-core AMD Opteron chip (200 PVUs vs. 100 PVUs). Note that single-core chips almost always require 100 PVUs (with the exception of Cell processors). The latest PVU conversion table can be found here. IBM continually updates this table to reflect new developments in processor technologies. Currently, PVU calculations are based on Processor Vendor, Brand, Type and Model Number.

Be aware that the use of the word “processor” may sometimes lead to confusion. IBM uses the word processor to indicate a “core”, as opposed to a “chip” (or “socket”), which may contain multiple cores. Some hardware vendors however define “processor” as being a “chip”. Make sure that these distinctions are understood when using software asset management (SAM)-tools or a CMDB to determine the deployed quantity of PVUs.

Many Tivoli products (such as Tivoli Storage Manager and Tivoli Monitoring) are licensed based on the environment being managed by the Tivoli product. For example, when Tivoli Monitoring is used to monitor 500 servers in the environment, PVU entitlements must be purchased to cover all 500 servers. Customers who deploy these products in a large environment need to consider how to efficiently collect server hardware details in order to calculate PVU deployment.

Besides the PVU license metric, some server products are still licensed based on the install or the server license metric. Deployment for such products can be calculated by determining the number of installed copies (install) or physical servers hosting the software (server).

User based license metrics

The authorized user metric is the most common license type for user-based products. In some cases server-based products can also be licensed per user. Users are defined as people who access the software in any manner. Once a user is assigned as an “authorized user”, the license may not be reassigned to another user, unless the original user is being replaced on a long-term or permanent basis.

In some environments, it may not be straightforward to identify the end users of a certain product. For example, a database product may only be accessed by some third-party applications and a few administrators. In this case, all users of the third-party applications would also need to be licensed. When multiplexing technology is used, the same applies – all the end users need to be licensed. A useful thought experiment can be to ask the following question: “What would happen if I deactivate this product today, who would be affected?” Those people are usually the ones that would need to be licensed. Also note that for some server products, a minimum purchase quantity of authorized users applies. For example, the licensing terms and conditions of DB2 Workgroup Server Edition indicate that a minimum of 5 authorized users must be purchased per server on which it is installed.

Other common user-based license metrics include Concurrent User, Floating User and User Value Unit. Concurrent User licenses allow a certain number of users to access a program simultaneously. The number of licenses required is the maximum peak of concurrent users which have accessed the program at any time. Depending on the IT environment, it may be beneficial to deploy software which limits or measures concurrent usage to prevent usage to exceed the number of licenses.

Floating Users, which are common for Rational software, are similar to Concurrent Users. Floating User products usually require license keys to be installed on a central server. Each user then needs to “borrow” a license key to start using the program – in case no license keys are available, access is denied. Rather than measuring actual usage, the deployment quantity is determined by counting the number of installed license keys.

User Value Units (UVU), which is used for some Tivoli products, are similar to authorized users. Usually this metric is used to allow for tier-based volume licensing. For example, 5,000 users of Tivoli Identity Manager would require 5,000 UVUs, but 10,000 users would only require 7,500 UVUs. For each product the tier levels are different.

Within the Lotus brand, a special type of user license is the Lotus Domino Complete Enterprise Option (CEO) bundle. Normally, Lotus products require separate entitlements to be purchased for server products (such as Domino Enterprise) and client products (such as Lotus Notes). CEO bundles however are licensed based on the number of end users only – the supporting server software is “included” in the license. For some organizations this may provide a cost-effective alternative to the client-server license model. However, keep in mind that certain rules apply when using CEO bundles. One of the requirements when using CEO bundles is that each employee in the organization with desktop or laptop access needs to be licensed.

Other license metrics

There are many more license metrics than the ones mentioned above, some common ones are:

• Resource Value Unit (RVU): This license metric is used for some Tivoli products (in particular Tivoli Netcool). Rather than licensing the capacity of the servers being managed (in PVUs), other “types” of resources or devices (such as switches, printers, etc.) also need to be licensed. The specific rules for calculating the required RVUs differ for each product to which this license metric is applied. Determining the deployment quantity for products with this license metric is usually quite complex as it requires a deep understanding of the environment being managed.
• Millions of Service Units (MSU): This license metric is used solely for IBM software which is installed on the IBM mainframe, or zSeries. Products need to be licensed based on the total MSU capacity of each zSeries machine where the product is installed.
• Concurrent Session: This license metric is used for some Informix products. It requires that the maximum number of concurrent sessions connecting with the product at any time be licensed. An important difference between the Concurrent User and the Concurrent Session metric is that a single user can start multiple sessions. That is, a single user creating 10 concurrent connections to the Informix product would count as one Concurrent User, but ten Concurrent Sessions. Again, software which limits or measures concurrent usage can help to prevent peaks that exceed license entitlements.

Virtualization/Partitioning

In current IT environments organizations are increasingly using virtualization (such as VMWare) and partitioning (such as LPARs) to optimize the use of system resources and allow for flexible sharing of hardware capacity. However, this development has also introduced new complexities in the area of software licensing. The IBM licensing term for virtualization/partitioning is sub-capacity licensing, and it applies to PVU-based products.

In previous years, many IBM products were not eligible for sub-capacity licensing. This means that even if certain software was only installed on a single partition, the full capacity of the underlying hardware needed to be licensed (so-called full-capacity licensing). Since April 2009, IBM has expanded the list of products which are eligible for sub-capacity licensing to almost all IBM products. However, a customer may only apply sub-capacity licensing when certain conditions are met. First of all, a sub-capacity agreement must be signed with IBM. Customer must then deploy the free IBM License Metric Tool to monitor sub-capacity usage. Lastly, sub-capacity licensing is limited to certain listed eligible processor technologies and virtualization technologies.

It is important to remember that in case sub-capacity conditions are not met, the full-capacity rules apply. Customers who do not take sub-capacity counting rules into account therefore risk considerable underlicensing.

Creating an overview of IBM software deployment

Now that we know how the most common license metrics work, what is the best method of creating an overview of deployed IBM software? Unfortunately, there is no common approach which applies for all IBM products. Unlike some other software vendors, most IBM product installations are not linked to a specific license key. This means that there are usually no technical limitations to deploying more IBM software than is licensed. This allows for flexibility and scalability, but may create some headaches when trying to match licenses with deployment.

In some cases, using software discovery tools on desktops and servers can help to create an initial overview of installed IBM software. IBM products often also include a product console through which software deployment can be managed. Depending on the product and license metric, it is often possible to extract useful information from these product consoles for licensing purposes.

In order to calculate PVUs, it is essential that the correct hardware details are captured through scanning tools or a central CMDB (in small environments it may be feasible to collect this information manually). Technologies such as hyperthreading, virtualization, clustering etc. sometimes lead to the hardware details being captured inadequately. Make sure to double-check any hardware details which are used to calculate license quantities.

Wrap up

As discussed in this guide, there are many aspects to consider when dealing with IBM software licenses. IBM has a wide array of products with different licensing rules and metrics. The topics discussed in this article can help to get acquainted with the general rules and common issues.  When dealing with IBM software licenses in your organization, it is best to collect further information specific to your IBM products and IT environment.  In case you have detailed questions concerning IBM software licensing, don’t hesitate to ask help from software licensing expert.

This Quick Guide to IBM Licensing has been provided by Koen Dingjan of SolarCom. Koen is an entrepreneur in the area of Software License Management and Software Asset Management. From 2006 to 2009, he performed more than 60 onsite software license compliance inspections throughout Europe, on behalf of international software vendors. He currently performs software license optimization projects at end-user organizations.

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