IBM Cloud Pak: Solution for Shelfware?| SoftwareONE Blog

IBM Cloud Pak

Solution for Shelfware Licenses in the Future?

IBM Cloud Pak: Solution for Shelfware Licenses in the Future?

  • 10 March 2022
  • 5.1 minutes to read

Shelfware is a term used to classify software licenses that have been purchased (and for which often support is being paid) but that are not in use. Simply stated, the licenses are "on the shelf".

The root cause for organizations having  shelfware can be multiple:

  • Organizations buy more licenses than needed, with the intent to deploy more software in the future; but in the end the licenses are not deployed.
  • Organizations buy more licenses than needed as a result of a compliance settlement following an audit.
  • Organizations don’t have the visibility which software programs are actually in use. This lack of clear, complete and accurate insight often leads to unused licenses.  What is worse is that additional unused licenses may be purchased, adding to the shelfware.

Organizations don’t terminate or negotiate their contracts based on current usage or future expected requirements (e.g.: in line with its future roadmap strategy). Organizations mistakenly simply renew agreements for the same programs and with the same quantities, year over year.

Cloud Paks in a Nutshell

From time to time, IBM continues to revamp its software portfolio. An IBM program currently in use may go out of support in three to five years or is completely replaced by another IBM program with different licensing metrics. Recently, IBM focused its entire strategy on the Hybrid Cloud and AI software, by leveraging the recent RedHat acquisition; resulting in a new brand offering called IBM Cloud Paks.

Cloud Paks are AI-powered software, designed to accelerate application modernization with pre-integrated data, automation and security capabilities. In short, the majority of previous IBM software as well as new releases are available for customers in the Cloud Pak offerings. These offerings can be deployed in containerized environment thanks to the RedHat Openshift layer and Kubernetes technology. As an example, the products MQ, App Connect and Aspera are now included in the IBM Cloud Pak for Integration.

With Cloud Paks, IBM is investing on an estimated $1 trillion hybrid-cloud market. As a result, IBM has discontinued discount levels on many outdated IBM programs. This has been applied on its traditional license models to support the adoption of the IBM Cloud Paks.

How Cloud Paks Can Help with the Shelfware Challenge

Cloud Paks can be licensed with a new metric called VPC (Virtual Processor Core) which is more flexible than the old PVU (Processor Value Unit). VPC allows customers to pay for a fraction of the cores when software is deployed in a containerized environment rather than for all the virtual cores made available to the IBM product installed on a standard virtual machine.

Use Case

A well-known financial institute had Business Automation Workflow and FileNet in their environment. FileNet was being used as a supporting program within the Business Automation workflow and so was free of charge. The customer had plans to discontinue Business Automation workflow in two years as part of their IT strategy, but wanted to continue using FileNet. The challenge for the customer was that they had no licenses available for FileNet and had to incur additional cost to buy FileNet licenses if Business Automation was discontinued. Additionally, the Business Automation Workflow licenses were perpetual licenses which would have become shelfware licenses once the product was discontinued.

The introduction of Cloud Paks allowed a license upgrade from Business Automation Workflow to Cloud Pak for Automation. The Cloud Pak for Automation is a suite of IBM products which includes both FileNet and Business Automation Workflow. Using Cloud Pak for Automation allowed license flexibility for using FileNet content manager. As a result, the customer did not have to purchase additional licenses for FileNet, but instead use their existing licenses to upgrade to what the business needed and at the same time  save the Business Automation Workflow licenses from becoming shelfware.

Lastly, Cloud Paks offer the possibility to purchase software through subscriptions which, depending on the customer’s roadmap, can be more convenient and cost-effective to avoid the increase of TCO.

Benefits of Cloud Paks

  • Access to Value-Added Offerings in each Cloud Pak
    If a company is planning to migrate IBM workloads to the cloud or modernize them through container technologies, Cloud Paks may be the right choice to optimize the current IBM contract and leverage RedHat Openshift and RHEL stack which are included in the offering.
  • Flexibility
    The flexible licensing option within Cloud Paks provides the ability to mix and match capabilities and products upon demand. Clients deploy what they need, when they need it without engaging every time with IBM sales for a commercial trade-up or additional purchases. For instance, if the client owns Cloud Pak for Integration, they can easily upgrade from MQ to MQ Advanced without an additional transaction, because both products are included in the Cloud Pak.
  • Virtual Processor Core (VPC) Metric
    • The VPC metric aligns with the “virtual core” pricing model for many public cloud providers, making it easier to size because they are calculated on the fraction of cores used.
    • Clients running 100 or 120 PVU per-core hardware may free up significant excess capacity – 43% and 71% respectively – by converting to VPCs through the Committed Term License upgrade.
  • Other Benefits
    • Upgrades from Subscription and Support (S&S) protect client investments – and lock in pricing for the term.
    • Aligns to subscription and cloud-centric pricing models.
    • More favorable discounts for Cloud Paks compared to the standard IBM licenses.

Clients prefer Committed Term Licenses when compared to perpetual licenses as it offers a lower investment - when compared to a perpetual license model.

How SoftwareONE Can Help

We will:

  1. Assess your current IBM deployments and contract to identify any shelfware licenses and provide you with Cloud Pak conversion scenarios, where applicable.
  2. Use metering software like ILMT and License Service to gain measurable insights into current usage through internal audit time to time.
  3. Help align with your current business needs and conduct future roadmap planning
  4. Assist in decision making to terminate or (re)negotiate the contract based on your terms and all IBM contract alternatives available in the market.
  5. Identify price protection opportunities and arrange for future discounted prices that help with reducing shelfware and paying unnecessary maintenance on software not deployed.

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