Understanding IBM Licensing Basics
IBM is one of the biggest software publishers in the world. Over the last decades, IBM has acquired multiple software publishers (e.g. RedHat), which resulted in a very diversified product portfolio. Each software product comes with its own specific licensing metrics and methodologies to measure its consumption. This makes IBM licensing particularly hard to understand.
If you’re new to IBM software, you might want to start your relationship with the software vendor with the purchase of an IBM software license. But do you know what you should do to obtain such a license? Do you know what types of licensing models are available and what is the best type of agreement you should enter into? If you’re already an IBM customer, you may struggle with keeping track of all the changes that are happening all the time (e.g. renaming, re-bundling).
In this article we’ll explain in detail what you should know if you want to purchase IBM software licenses, what are the software usage options you have and how you can manage your licenses. In addition, we’ll go through the most important entitlement documents with their associated terms and conditions that you should pay attention to. To conclude, we’ll highlight the challenges most end users experience when they are trying to understand their IBM licenses’ models and related licensing information.
IBM LICENSE PROGRAMS & AGREEMENTS
IBM sells software licenses through different licensing programs. The most common used ones are Passport Advantage and Passport Advantage Express. The software obtained through these programs is governed by the IBM International Passport Advantage Agreement (IPAA) or International Passport Advantage Express Agreement (IPAEA).
You can find a short description of these two Agreements in our recent article IBM’s Passport Advantage Agreement – An overview.
HOW TO GET AN IBM PASSPORT ADVANTAGE AGREEMENT
In order to get an IPAA, you are required to complete and submit an International Passport Advantage Agreement Enrollment form (the enrollment can be online or through an authorized IBM Business Partner).
If your organization does not have an existing IBM Passport Advantage Agreement, you’ll need to use online enrollment to enter your data (please note that electronic submission is not enabled in all countries, so for some countries, the online enrollment requires some additional steps).
IBM is listing here what are the advantages you can get from enrolling in Passport Advantage.
When enrolling into an IPAA, you need to sign the enrollment form. Based on your region or country, the enrollment form requires either one signature, two signatures or no signature at all. The list of the signature requirements can be found here.
After enrolling into IPAA, you can order your IBM Licenses through an IBM Business Partner, an IBM sales office or online, via Passport Advantage (for existing customers).
YOUR 1st IBM LICENSE – WHAT SHOULD YOU KNOW?
The initial license purchase includes, in most cases, a base license and first year support (Software Subscription and Support). The individual components can not be ordered separately, but are offered as a complete solution. After you purchase a new IBM software license, you have the option to renew the IBM Software Subscription and Support. In order to continue to benefit from software subscription and technical support, you will need to renew annually.
When to Renew?
- The primary contact within your organisation (“Passport Advantage Primary”) will receive a contact verification request approximately 120 days before each renewal is due
- A renewal quote will be sent approximately 105 days before the IBM Software Subscription and Support anniversary date
- Renewal email reminders will be sent at 60, 45, 30 and 15 days (prior to the renewal date)
How to Renew?
Review the renewal quote and choose from the following renewal options:
- Contact an authorized IBM Business Partner for final pricing and fulfillment
- Contact your IBM Renewal Representative
- Sign in into Passport Advantage Online to complete the renewal (for existing customers); this option is available in most countries, but not in all.
Based on the initial purchase of licenses and IBM Software Subscription, the Relationship Suggested Volume Pricing (RSVP) Level is calculated and will be recalculated after every transaction, considering all entitlements purchased under the same agreement.
IBM SOFTWARE USAGE OPTIONS
IBM grants software use rights on a fixed term or on a perpetual term (indefinite). Certain IBM software programs are offered on a fixed term basis only for an on premise deployment whereas other IBM software programs are offered in a hosted environment as part of a SaaS solution. As such, the licensing options available are, to a certain extent, depending on the type of deployment (on premise vs SaaS).
HOW DO YOU MANAGE YOUR LICENSES?
An easy way to administrate your Passport Advantage accounts can be done through IBM Passport Advantage Online.
What can you use the Passport Advantage (PA) portal for?
- Download software and order software media
- Purchase new licenses
- Renew IBM Software Subscription and Support and extensions for fixed term licenses
- View Proof of Entitlement certificates, entitlement allocations, inventory and deployments
- View downloaded software, media order history, entitled software, migration history, purchase history and active renewal quotes reports at the Enterprise or Site level. Through this, you can extract an IBM Passport Advantage Overview that contains all your acquisitions details.
WHAT TERMS AND CONDITIONS DO YOU NEED TO AGREE WITH WHEN DOWNLOADING THE IBM SOFTWARE?
IBM describes license entitlements and product use rights with the associated terms and conditions in various contractual documents, the most common being:
- International Passport Advantage Agreement (IPAA) – the IBM Agreement which governs the Passport Advantage relationship between the customer and IBM.
- International Program License Agreement (IPLA) – the base license agreement IBM uses for distributed software worldwide. This is offered through the two Passport Advantage (PA) Programs: Passport Advantage and Passport Advantage Express programs. Where licenses are obtained under Passport Advantage, the IPLA terms are incorporated by reference and are in some respects modified and/or overridden.
- License Information (LI) Documents – program specific document which explains the exclusive terms and conditions of the specific program as well as technical requirements.
Additional terms and conditions can be found in the Software Announcement Letters. These include information about specific products, including technical features, ordering and pricing information, and licensing terms and conditions.
CHALLENGES YOU MAY ENCOUNTER
- Because of all the acquisitions, the portfolio of IBM software is constantly growing, resulting in a large amount of different licensing models and license information documents you need to keep track off.
- The amount of knowledge you need to have in order to understand the level of detail of your Passport Advantage report is not to be underestimated. There is a large amount of details with regards to your transactions, site number, agreement numbers, sales order dates, quantities, migrations, metrics, order owners, license descriptions, part numbers, etc.
- The rights and limitations applicable to the licenses can only be found in the products license information documents and announcement letters and not in the contracts themselves. These documents are published online and subject to change upon the discretion of IBM.
- Reconciliation of the licenses and support transactions.
- Understanding the chronological evolution of a product.
IBM offers an extensive product stack and uses various licensing models. In order to optimize the management of your software assets and avoid financial risks, it is important to have an in-depth understanding of the specific licensing terms and conditions.
You might want to consider getting the assistance of experts who can manage and help your business to better understand your software assets. B-lay’s specialists can support you in taking control of your software assets. We offer a range of practical solutions through a combination of services and software. Reach out to us and find out how we can help you.
This article was published on 16-04-2020
Simona started working in the SAM industry in 2015, as a Contract Analyst. She performs in depth analysis of contractual terms and conditions as agreed upon between end users and software publishers. Her main focus is on Oracle & IBM. Through the contractual analysis performed, Simona helps the customers to obtain a complete, accurate and factual license entitlement overview. Simona holds a master degree in Engineering, from Politehnica University of Bucharest.