IBM’ PassPort Advantage Agreement – Things to Consider When Managing the Virtualized IBM Inventory

By Michael Koss, Anglepoint Group, Inc.

On July 18, 2011, IBM updated their standard base International IBM PassPort Advantage Agreement (IPAA). There were two significant changes introduced in that updated agreement a year ago that often get overlooked by IBM’s enterprise customers. In this article, we’d like to highlight those changes and provide things to consider that can help you more efficiently manage your IBM environment – all while maintaining a watchful eye to adhere to the terms of the agreement. The primary benefits would be to reduce noncompliance risk and have better control over your annual software maintenance needs and costs going forward.

Let’s first define some terminology and review IBM’s contract terms from a historical perspective. In 2005, IBM introduced Subcapacity licensing. IBM Subcapacity licensing allows a customer to license for the virtualized portion of a server(s) that has access to a software program. Given the nature of today’s hardware technology capacity, it is most often economically beneficial to license only for the virtualized pool of available resources. If a company chooses to license under the Subcapacity model, IBM enforces certain requirements in order for a customer to receive this pricing “benefit.”

The primary contractual requirement for Subcapacity licensing is that you need to install the IBM License Metric Tool (ILMT) or the Tivoli Asset Discovery for Distributed (TADd) tool. These tools are successors to the ones IBM required back in 2005. Both current tools are capable of capturing deployment data and calculating Processor Value Units (PVUs) in order to determine amount of licenses required. This assumes you are already using an eligible virtualization and processor technology as posted by IBM. The tools are not required for installation as part of Subcapacity eligibility if your enterprise has fewer than 1,000 employees and contractors or if your total environment is less than 1,000 PVUs in terms of sub-capacity. In those scenarios, IBM permits manually tracking your licenses and deployments.

Other requirements of note are that a Subcapacity eligible customer must run and electronically sign these audit reports from ILMT or TADd once every 3 months, retain these reports for 2 years and “make them available to IBM upon request.” When the Subcapacity offering was first introduced by IBM in 2005, there was language in the agreement that a customer was required to send these audit reports to IBM quarterly. However, in November, 2007 IBM eliminated this requirement and simply specified the requirement to run, sign quarterly and make the reports available upon request. So, now that we have outlined some terminology and key requirements from a historical perspective, let’s now shift to the two major changes introduced by IBM in July 2011.

  1. Customers no longer need to sign and execute a separate Subcapacity agreement. It was automatically rolled into the new IPAA base agreement.
  2. You must maintain (via subscription and support) ALL IBM licenses for every installed and in-service product – or cover none of them.

The fact you no longer are required to sign a separate Subcapacity agreement might help eliminate the need to manage multiple contracts or addendums. However, it doesn’t necessarily reduce the confusion that often surrounds this offering. The current IPAA basically presumes every IBM customer that installs PVU metric based software fully understands they must install one of the approved tools (ILMT or TADd) and maintain reports for 2 years. Given that the new IPAA is a passive agreement (no signature required in most cases), there are still a number of IBM customers that don’t realize they have contractually accepted the terms stated regarding Subcapacity.

Secondly, it is not explicitly stated that you must enable the tool (i.e. install agents) on all of your IBM PVU based software; only the virtualized servers in your environment are explicitly mentioned. Many IBM customers are thinking that as long as they deploy ILMT or TADd agents in their virtualized environment, there is no need to consider deploying agents in your entire PVU-based server farm (physical and virtual). Conventional thinking is that “I have met my contractual requirement,” which would be an accurate statement. In fact, a couple IBM external websites state “it is recommended you deploy agents to all your servers that may contain IBM PVU based software. It is required to deploy agents in your virtualized environment.”

However, it is really the second major announcement in IBM’s 2011 change in the IPAA that should cause you to reconsider your IBM tool (specifically the agents) deployment strategy. The “ALL or NOTHING” requirement regarding your subscription and support coverage assumes one very important thing – that you have a complete handle on your IT controls and can demonstrate how many licenses are in active use within your entire IBM enterprise (physical and virtual). This is of particular importance if you are planning to downgrade coverage on your subscription and support during your annual maintenance renewal. You may be asked to provide evidence of active use. If you’ve only deployed agents out into your virtualized environment, it may be difficult to demonstrate that your active use matches the reduced quantities in coverage that you are now requesting.

In order to avoid this potential situation, you may want to consider deploying ILMT or TADd agents out into your entire IBM PVU software based environment (both physical and virtual). In many IT shops today, it is not unusual for environments to be greater than 50% virtualized – with plans to virtualize even more so in the future. A significant number of enterprises are virtualizing 90% of their environment or more, so why stop full coverage for agent deployment at that point?

Fully deploying agents can help you assess your annual subscription and support coverage needs more effectively, allowing you to make the best financial decision possible. It can help you better understand your software usage and needs and provides the data necessary to support a decision to downgrade subscription and support coverage if questioned by the IBM Maintenance Renewal team.

In addition, fully deploying agents improves your comfort level that you are not on the brink of noncompliance with your license usage and terms, relative to PVU based IBM products. Version 7.5 is a noticeable improvement from prior versions and proving to be a good tool to have in your overall Software Asset Management (SAM) program.

From an overall SAM efficiency and effectiveness aspect, deploying ILMT or TADd agents out to your entire physical and virtual environment makes good sense as well. Building agent installation into your server deployment and refresh process from the beginning means you habitually do this for every new physical install or new guest that is brought up under the host. Coupled with a sound change control practice, this can strengthen your overall SAM process and reduce noncompliance risk. In short, you’ll have greater visibility into your entire IBM PVU install base.

Before rolling out agents to every physical server in your environment that may contain IBM PVU based software, careful consideration and planning should be done to ensure that there is no negative impact on performance in your IT environment. While statistics show that there should be minimal to negligible impact on performance, you should always consult your infrastructure planners and technical support team.

In summary, most IBM software customers virtualize their environments to some extent. The most recent 2011 IBM PassPort Advantage Agreement allows their customers to license for virtualized use only if they prefer. However, they are required to install ILMT or TADd and manage the tool, run quarterly reports and be able to present them upon request by IBM. The contract specifically requires installation and management of the tool only for the virtualized use. Given that the recent agreement also requires a customer to maintain subscription and support on “all or none” of their software, the key will be to demonstrate how many licenses are in active use. Fully deploying agents into your environment will help arm you with the necessary data to support a decision to downgrade coverage. It can also help you predict and better manage your overall PVU based license and maintenance needs. Finally, it gives you more protection against the possibility of noncompliance, especially if you have difficulty demonstrating software deployments between your Full Capacity and Subcapacity environments.