IBM Licensing FAQ.

How to use this FAQ.

This FAQ is the quick reference for the 60 most common single point questions on IBM licensing. Each answer is short. Where deeper reading exists, the answer links to it. For the long form reference, see the IBM Licensing Complete Guide. For product specific questions, see the IBM Product Licensing Guide. For sub capacity specific questions, see Sub Capacity Explained.

1. Programmes and contracts.

What is Passport Advantage?

The default commercial programme for mid market and enterprise IBM software buyers. The framing contract is the International Passport Advantage Agreement. Volume points drive into discount bands. See the Passport Advantage guide.

What is an Enterprise Agreement?

A bespoke amendment to Passport Advantage. Multi year commitment, fixed discounts, custom metrics. The EA is the most consequential commercial document. See ELA versus Passport Advantage.

What is the IBM Customer Agreement?

The standing legal frame for the IBM customer relationship. The ICA sits beneath both Passport Advantage and the EA. Rarely renegotiated in the same cycle as the commercial documents.

What is the difference between Passport Advantage and Passport Advantage Express?

Express is the small footprint variant of the same programme. The Express agreement caps the discount tier and the migration to standard Passport Advantage is itself a negotiation event.

How long does a Passport Advantage agreement run?

The PA contract is open ended. The transactional commitment runs by Support and Subscription term, typically annual.

Can I terminate Passport Advantage?

Yes. The buyer can stop renewing Support and Subscription. The entitlement persists but the support entitlement ends at the next anniversary.

2. Metrics and counting.

What is a PVU?

Processor Value Unit. The per core licence metric for most middleware. The PVU rate per core depends on the chip type. See PVU explained.

What is a VPC?

Virtual Processor Core. One per virtual CPU. The default modern metric for Cloud Paks and watsonx products.

What is an RVU?

Resource Value Unit. Variable scale per product. Used for storage, networking, security products.

What is a UVU?

User Value Unit. Counted by user with tiered scaling. Used in some collaboration and analytics products.

What is an MSU?

Million Service Units per hour. The mainframe MLC metric, counted on the four hour rolling peak.

How do I count PVUs for a vSphere VM?

Sub capacity rules apply. The PVU count is the vCPU count multiplied by the per core PVU rate for the underlying chip, captured by ILMT.

Is the PVU rate the same across all chips?

No. The PVU rate per core varies by chip type, typically 70 to 100 PVU per core for the common x86 chips, higher for some legacy chips.

3. Sub capacity and ILMT.

What is sub capacity?

The entitlement framework that allows licensing to the virtual processor footprint rather than the full physical capacity of the underlying server. See Sub Capacity Explained.

What is ILMT?

IBM License Metric Tool. The required tool for sub capacity compliance. Scans servers, generates Audit Snapshot reports. See ILMT Guide.

How often must ILMT scan?

Continuously, with quarterly Audit Snapshot reports retained for two years.

What happens if ILMT is not deployed?

The customer falls back to full capacity licensing on the affected servers. This is the single largest avoidable cost in most enterprise IBM estates.

Does sub capacity apply in the cloud?

Yes, through the IBM Cloud Sub Capacity terms attachment. AWS, Azure, GCP, and IBM Cloud are all supported.

Does sub capacity apply to containers?

For VPC products on OpenShift yes, through the IBM License Service. For PVU products on containers, see container licensing.

4. The IBM audit.

Can IBM audit me?

Yes. The audit right is in the Passport Advantage agreement. See your audit rights.

How much notice does IBM give?

Typically 30 days, sometimes less in renewal driven audits. The audit is announced by letter.

Who runs the audit?

Either IBM directly or a Big Four firm under engagement (Deloitte, KPMG, EY, PwC). See Deloitte and KPMG audits.

What are my rights inside an audit?

Defined data scope, defined audit period, no production system interruption, response to a formal Statement of Compliance. See audit legal rights.

What triggers an IBM audit?

Renewal cycle, acquisition or divestiture, public cloud migration, leadership change at the IBM account. See audit triggers.

Should I respond to the audit letter myself?

Most enterprises engage independent advisory at the point of the audit letter. See audit defense.

How long does an audit take?

Four to six months from receipt of the audit letter to settlement is typical.

5. Renewal and negotiation.

When should I start the renewal work?

12 to 18 months before the renewal date. See renewal negotiation.

Can I negotiate the discount on Passport Advantage?

Yes. Volume discount, bid discount, and any Enterprise Agreement discount stack.

What discount level should I expect?

The benchmark range across IBM product lines is roughly 30 to 80 percent off list, with the high end reserved for strategic transformation deals. See discount benchmarks.

Should I sign a multi year deal?

It depends. The multi year structure trades flexibility for price. See multi year strategy.

Can I co term my contracts?

Often yes, and it is the right move when you have multiple expiry dates. See co term strategy.

What is a true up?

The annual reconciliation against the actual entitlement consumed. See true up management.

6. Cloud Paks and Red Hat.

What is a Cloud Pak?

A modern IBM platform offering bundling several IBM products and a defined Red Hat OpenShift entitlement under a single VPC metric. See Cloud Pak strategy.

Do I need standalone OpenShift if I have a Cloud Pak?

Usually no. The bundled OpenShift in the Cloud Pak typically covers the workload. The standalone OpenShift purchase is the most common Cloud Pak duplication.

How is OpenShift licensed?

By node subscription. Each OCP node is a subscription. The bundled OpenShift in a Cloud Pak is sized to the Cloud Pak.

How is Red Hat Enterprise Linux licensed?

By socket pair on physical hosts, by VM on virtual hosts. See the Red Hat Strategy white paper.

7. Mainframe questions.

What is MLC?

Monthly License Charge. The metric for z/OS, CICS, IMS, Db2 for z/OS, MQ for z/OS. Charged on the four hour rolling peak MSU.

What is IPLA?

International Program License Agreement. The fixed entitlement metric for most additional mainframe software.

What is SCRT?

Sub Capacity Reporting Tool. The mainframe equivalent of ILMT, captures the four hour rolling peak.

What is Tailored Fit Pricing?

The IBM offering that flattens the peak based MLC charge. The decision to migrate is multi year and is usually only right for growth workloads.

8. Mergers and divestitures.

Do IBM licences transfer in an acquisition?

Not automatically. The contract typically requires IBM consent. See the M and A compliance guide.

Can I split entitlement in a divestiture?

Yes, by separate Passport Advantage agreement on the divested entity. The TSA period needs careful scope.

Are inherited audits common?

Yes. An acquisition is one of the top three audit triggers. See audit triggers.

9. Commercial and pricing.

How is IBM list price set?

Published in the Passport Advantage price file. Updated periodically by IBM.

What is the Suggested Volume Point system?

The unit by which volume discount tiers are calculated. Volume accrues over time.

Is the S and S uplift negotiable?

Yes, the annual Support and Subscription uplift is a discrete negotiation lever, particularly inside an Enterprise Agreement.

10. Working with us.

Are you an IBM Business Partner?

No. We are independent. We are not an IBM Business Partner, reseller, or affiliate. We do not earn margin on IBM software.

How are engagements priced?

Fixed fee or capped time and materials, scoped by deliverable. See services overview.

Do you replace our in house team?

No. We work alongside the in house Software Asset Management and Procurement functions.

How do I start?

The contact page is the entry point. A senior advisor responds within 24 hours.

Where to go next.

For the long form reading continue to the Complete IBM Licensing Guide. For product specific answers continue to the IBM Product Licensing Guide. For sub capacity continue to Sub Capacity Explained. The white paper library and the full insights blog remain available for ongoing reference. For a scoped advisory conversation, the contact page is the entry point.