On February 1, 2023, IBM announced significant changes to its Passport Advantage Agreement (IPAA) that will impact all new customers. These changes extend to current customers on May 1, 2023.
Here are five key changes:
What IBM says:
"Client will, for all Programs at all Sites and for all environments, create, retain, and each year provide to IBM upon request with 30 days’ advance notice: i) a report of deployed Programs, in a format requested by IBM, using records, system tools output, and other system information and ii) supporting documentation (collectively, Deployment Data)." 1
What changed?
IBM already had the right to request usage data for software in IBM Program License Agreements (IPLAs). Now, this right extends to IPAAs.
Previously, you only needed to retain IBM License Metric Tool (ILMT) audit snapshots for sub-capacity eligible products for two years. You must now maintain yearly compliance for all IBM products. However, the IPAA doesn’t specify how long to retain your annual positions.
IBM is also pushing back on written confidentiality agreements with independent auditors. This move indicates that attaining a separate NDA with IBM’s appointed independent auditors might be more difficult. We advise you to work with a partner who can provide an additional NDA that offers you protection.
What does this mean for you?
You must keep annual records of your IBM software usage — for all your locations and environments. If requested, you must send IBM this information within 30 days of notification.
IBM still reserves the right to conduct a full audit every three to four years. But IBM will now use your yearly report as a baseline for the audit while retaining the right to request additional data.
1 IBM (2023, January 31). International Passport Advantage Agreement, Section 4.1a. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
What IBM says:
"Client will promptly order and pay at IBM’s then-current prices for i) any deployments in excess of authorizations indicated on or by any annual report or verification; ii) applicable S&S for such excess deployments for the lesser of the duration of such excess use or two years; and iii) any additional charges and other liabilities determined as a result of such verification, including but not limited to taxes, duties, and regulatory fees." 2
What changed?
In September 2021, IBM changed its pricing for specific on-premises part numbers. Now, IBM is removing entitled discounts for some products traditionally deployed on-premises up to 24%.
Entitled discounts remain unchanged for on-premises hybrid and multi-cloud platforms, and you can still earn points on offerings that are no longer eligible for discounts. You will enjoy longer-term benefits and entitled discounts when you purchase cloud and hybrid offerings.
Effective January 1, 2023, IBM also increased its price harmonization across its software product portfolio by 8% worldwide and up to 15% in selected countries.
What does this mean for you?
You must proactively manage your IBM licenses to avoid compliance violations and pay more for additional use. Transitioning to IBM’s cloud or hybrid offerings can help you save money.
Now is also the time to transition to IBM’s equivalent cloud or hybrid cloud offerings. Building a cloud roadmap allows you to take advantage of greater discounts on IBM’s offerings. If IBM makes moving to the cloud mandatory in the next few years, these discounts may no longer be available.
2 IBM (2023, January 31). International Passport Advantage Agreement, Sections 4.1c. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
What IBM says:
Previously separate "attachments" for license/use forms have been integrated into the current Passport Advantage contract. This applies to Subscription Licenses, Container Licensing, Government Option, and Academic Volume Option. 3
What changed?
IBM simplified its documentation for specific licenses and use forms.
What does this mean for you?
You don’t need to sign or maintain a separate addendum for the above mentioned items.
3 Paraphrased from IBM (2023, January 31). International Passport Advantage Agreement, Section 2.4c. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
What IBM says:
"If Client requests to renew expiring S&S at a lesser quantity of IBM Program uses and installations than the expiring quantity, Client must provide system-generated documentation that verifies current uses and installations of the IBM Program to IBM, as specified in the Agreement. If the documentation is not received by IBM at least 30 days prior to the S&S renewal date, Client must renew all expiring quantities." 4
What changed?
If you want to renew your Software Subscription and Support (S&S) for fewer uses, you must first verify your current uses and installations. If you don’t submit this information 30 days before your renewal date, you must renew all your expiring quantities.
It’s not clear what IBM means by “system-generated documentation.” This most likely relates to ILMT and License Services. But it may also include logs, scripts, and other measurements. Note that IBM does not officially endorse these other measurement methods.
What does this mean for you?
ILMT has enhanced reporting that tracks authorized users, installs, and other custom metrics. You should set up your metrics in ILMT for timely usage measurements.
4 IBM (2023, January 31). International Passport Advantage Agreement, Section 8.1g. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
What IBM says:
"For EPs running in Full Capacity, in all Sites and environments, Client may track (manually or using available IBM tools) and report Client’s licenses for each EP at least once a year and retain each report a minimum of 2 years and provide reports to IBM upon request." 5
"For EPs that no longer meet Sub-Capacity Licensing requirements for which Client would like to continue to license under Sub-Capacity Licensing terms, Client will submit a migration plan to meet the Sub-Capacity Licensing requirements for IBM's review and approval. During this migration, Client shall maintain the version of ILMT that supported the EP based on the Sub-Capacity Licensing requirements prior to becoming ineligible and continue to generate ILMT reports. With IBM's prior written consent, Client may manually manage and track such EPs in accordance with item d above."
What changed?
IBM now expects all customers to create reports supporting their compliance positions using IBM tools or manual processes. You must keep these reports for at least two years.
Clients have the option now to seek prior IBM Approval agreeing to migration plan . Earlier the announcement date from IBM was considered final.
However, manually reporting your container licenses is no longer permitted. You must use an IBM License Service (ILS) to run quarterly reports and maintain these records for at least two years.
What does this mean for you?
Your reporting must use records, tools, automated outputs, and system information maintained within IBM products. Deviating from this format can make it far more difficult for you to defend against a compliance disagreement with IBM.
This means that with prior approval from IBM on Migration plan Clients can still be eligible for Subcapacity that no longer meets Subcapacity Requirements and have passed the IBM provided deadline for migration in IBM Announcements.
5 IBM (2023, January 31). International Passport Advantage Agreement, Section 10.2d. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
IBM is conducting more frequent audits and expects you to manage your usage proactively. Failure to comply with IBM’s new rules will lead to consequences, such as audits and fines.
Here are five ways to stay on top of these changes so you can mitigate your compliance risks:
6 IBM (2023, January 31). International Passport Advantage Agreement, Sections 1,b and 4.b. IBM Terms. Retrieved March 10, 2023, from https://www.ibm.com/support/customer/csol/terms/?id=Z125-5831&lc=en#detail-document
Gathering your required documentation for IBM can take six months. If you put this off, you won’t meet IBM’s 30-day deadline and can get penalised.
But you don’t need to go it alone.
As IBM license experts, SoftwareOne can help you mitigate risks and prepare your documentation. Our team of former IBM auditors can help you:
Contact us to discuss how you can optimize your IBM licensing strategy and cut unnecessary costs.
Reach out to discuss how you can optimize your IBM licensing strategy and cut unnecessary costs.
Reach out to discuss how you can optimize your IBM licensing strategy and cut unnecessary costs.
