ILMT and IBM AUDITS
Despite IBM’s remarkably successful shift to its cloud services with US$20bn+ revenues, its legacy business is still substantial with many customers still using – and depending on – IBM middleware and solutions on-premise. However these customers should not be anxious that they are being overlooked: there is still a vigorous audit cycle in place with KPMG’s and Deloitte’s licensing divisions busy identifying under-licensing liabilities across enterprise and public sector customers.
These IBM software license reviews (= software audits) are intensely challenging given its 24,000 different product lines and 250 different licensing metrics.
However, at the heart of most audits are two questions which give radically different answers to how much the customer owes: Is IBM’s License Metric Tool (ILMT) installed? And are you reporting correctly under that?
If not, then, license fee demands are triggered often at 3-4 times the pricing that would have been obtained if this monitoring tool had been in place.
ILMT is not compulsory. But its correct use enables customers to take advantage of IBM’s sub-capacity licensing pricing as opposed to the default ‘full-capacity’ licensing.
ILMT monitors actual loads every 30 minutes and so can report maximum usage across time. Without the tool, IBM assumes that the processing power of the servers and clusters are used to the full and, accordingly, the full value of all attributable processor value units (PVUs) must be charged.
IBM is insistent on the key conditions being met in or outside any audit process. ILMT is a free download and there is support provided the customer places a (free) order for ILMT in order to establish an IBM entitlement record for the license as well as software subscription and technical support. However, ILMT is not easy to install or run.
IBM insists that, with ILMT’s latest version 9.2x, there is its BigFix Inventory management also in place. This monitors every machine in the environment including backup and recovery machines, in order to ‘ensure audit readinesses’.
The license rules are exacting, declaring in the Passport Advantage Agreement that ‘Product deployments that cannot meet Sub-Capacity Licensing requirements must be licensed using Full Capacity terms.’ These are that the relevant products are eligible for sub-capacity licensing, eligible virtualization and processors technologies are used; and quarterly reports are returned. If any of these conditions are not met for any reason, the customer does not advantage of IBM’s concessionary pricing.
So, that’s clear: IBM’s position is both immoveable and implacable.
The difficulty is the problems in installing or rolling out ILMT, despite its longevity (since 2008). These are many and can revolve round inability to access the web console, BigFix crashing, and migration issues to ILMT’s latest version.
In the usual course, these difficulties count for nothing: either the sub-capacity conditions are met or they are not.
However, dig deeper and IBM’s rigid license structures begin to unravel. Its insistent statement under the IPAA that ‘Failure to generate Reports or provide Reports to IBM will cause charging under full capacity for the total number of physical processor cores activated and available for use on the server’ does not have the legal weight that IBM and the industry seem to believe and accept.
Critically, key pivotal expressions such as ‘available for use’, ‘activated’ and ‘processor core’ are not defined. Nor indeed is ‘full-capacity’. Starting from differing interpretations that could then be overlaid, one can begin to build a case as to the instability of elements of IBM licensing.
IBM will never openly concede those points. But in any audit situation, the most astute method is to confidently begin to destabilise the vendor, pushing forward authoritative legal and technical arguments. And then to use these, powerfully, in strong commercial negotiations to obtain the lowest-cost settlement.
Many consultants take the view that IBM’s sub-capacity/full-capacity licensing rules are unassailable. We disagree. Yes, users should properly pay – but only for their true usage particularly where there have been significant difficulties in installation of IBM’s own license metric tool.
Increasingly, within audits, there are plaintive complaints as to the difficulty in installing ILMT – or running it correctly across the environment. There are 1,000s of questions and observations round this on IBM forums clearly evidencing that this is not an easy administrative task but one that, for some organisations, is a serious or impossible task.
If that is the case, then demands based on full-capacity licensing need to be reduced down. However, this needs carefully-marshaled arguments and a committed belief that IBM’s license terms are not, in fact, as certain as they (and others) might believe.