Keeping track of your organization’s IBM licensing can be a challenge.  Especially when you have a mix of named user licenses and Processor Value Unit (PVU) licenses.  The Processor Value Unit (PVU) metric is popular for server-based products. PVU licensing can be great given the significant cost savings that can be achieved when running an environment with many users, but it can also be very challenging to understand and manage.  Let’s walk through what you need to know and look out for if you have IBM PVU licenses.

What is IBM’s PVU License model?

The two most common types of license that IBM offers are the Named User licenses and Processor Value Unit licenses.  The concept of a named user license is relatively easy to understand.  For example, I have one (1) Cognos Analytics User License and it is assigned to John Smith.  He is the only one authorized to use that license until he leaves the organization, and/or the license is reassigned to another user.  A PVU license, on the other hand, is a little more challenging to describe.

Prior to launching PVU licensing in 2006, IBM licensed its server-based products per processor.  With the introduction of multicore processors, IBM wanted a way to measure the processing power of different servers.  The PVU licensing model is based on processor cores.  The costs involved with multicore processors are in correlation with computing power, as the performance of the dual-core processor is much higher than that of a single-core processor.  The calculation of the PVU entitlements is based on the performance of the respective processor technology.  This is reflected in the IBM PVU tables.  The higher the performance of a processor, the more PVUs must be licensed per processor core.  It is important to note, IBM updates their PVU tables periodically in line with the development of processor technologies.  It’s important for organizations to remember as their IT department replaces hardware, the PVU licensing required often changes as well.

How does IBM calculate PVUs?

As a basic principle, the number of processors (sockets), is multiplied by the number of cores.  After determining the corresponding number of PVUs per core using the IBM PVU tables, this number is multiplied by the number of PVUs.  For example, 2 processors x 4 cores x 100 PVUs = 800 PVUs.

The next challenge in understanding PVU licensing involves full capacity versus sub-capacity licensing.  By default, IBM customers are subject to full-capacity licensing, i.e. they need to license all activated physical processor cores, regardless of whether the IBM software uses all the computing power.

If customers meet the sub-capacity licensing prerequisites of IBM Passport Advantage, they do not need to license all physical cores available.  In virtualized environments, they only need to purchase PVU entitlements for those processor cores that are available to the IBM software.  The maximum number of processor cores to be licensed is equal to the quantity of physical cores available.  This means that the number of cores to be licensed via sub-capacity will never exceed the total of full-capacity licensing.  For example, if you are limiting your use of a virtualized server with sixteen cores to just four cores for use with your IBM software, the following requirement would apply. 4 cores x 50 PVUs = 200 PVUs.  Keep in mind, to use sub-capacity licensing, by IBM rules the product must be eligible, on authorized processor and virtualization technology, and running the IBM License Metric Tool (ILMT).

What is the ILMT and do I need to install it?

There are only a few circumstances where IBM customers are not required to install ILMT when using PVU licensing.  However, while you may not be required to install ILMT you will still be required to create a manual report (most often an Excel spreadsheet), which does not necessarily involve less work.

As you may have surmised by now, the ILMT counts the PVUs you need in order to be licensed correctly.  It is a “free” tool provided by IBM and only relates to the management of IBM products licensed with PVUs.  I say it’s a free tool, but installing the software can be challenging.  Unless you really understand all the complexities of the program, you will likely require the assistance of an outside consultant.  Oh, and did I mention the ILMT tool requires a separate server?

After the ILMT server has been installed and deployed, the software findings must be processed within ILMT. For example, every software component must be confirmed, reassigned, or excluded.  Once all the software findings have been processed, the compliance report can be run and submitted to IBM.  For example, the IBM Passport Advantage Agreement states that you must keep accurate IBM License Metric Tool (ILMT) reports and have them available to give to an auditor within 30 days, should IBM request it.

The License Metric Tool is also subject to strict regulations.  Customers need to create reports quarterly.  The ILMT reports are then stored and provided to IBM or their audit team upon request.

What happens if I’m selected for an audit and I have not been running the ILMT tool?

IBM could determine that you are non-complaint and fail the audit even if you aren’t using more PVU’s then you have.  This is because the sub-capacity agreement states that if you don’t install it, IBM can assume you are using the full capacity of the servers.  As a result, you may be forced to pay PVU’s to cover the entire server.  For example, you have 16 cores on your virtualized server and allocate 4 cores to Planning Analytics (PA).  The server is rated 50 PVU’s per core.  Even though you have only allocated 4 cores @ 50 PVUs per cores for a total 200 PVUs to PA, IBM could charge you for another 600 cores because the server could max out to 16 cores.  Even if you only allocated 4 cores, you could fail the audit just for not having the ILMT tool installed.

What are my options to maximize my license agreement?

From a business perspective, the savings that can be achieved through purchasing PVU and sub-capacity licensing should be weighed carefully with the additional costs that may be incurred through managing the ILMT requirements.

For a review of your licensing and help to better understand the reporting requirements, please contact eCapital Advisors.

Michael Petersen

Michael spent the first twenty years of his career as a corporate event planner arranging meetings and sales incentive trips worldwide for Fortune 500 Clients. Michael joined eCapital Advisors in 2011 to help organize marketing events; however, soon after coming on board, he was given the opportunity to build a software subscription and renewal practice and took on the role of Inside Sales Manager. Michael’s main goal at eCapital Advisors is to help our customers navigate the often times complex renewal process and to save them money.

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