IBM Software on Virtual Servers Could Expose You Millions (Literally)!

Do run your IBM server software in a virtualised environment? Do you know what a PVU is? Do you run ILMT? Did you know that if you have IBM server software on a virtual server and you don’t run IBM’s ILMT, then you are exposed financially for the licence cost of difference in computing power between your virtual server and the physical host. That literally could be millions of dollars.

If you have financial responsibility for licencing, you are a CFO, CIO, senior IT or finance manager, read on. Then ask the tough questions of your IT team and make sure you are compliant.

Why are you Exposed?

Most corporate servers are virtual servers and very few are stand alone physical machines. With virtualisation, comes the ability for you as an administrator to wind up or down the cores assigned to the virtual machine. So you could, for example, have a VM for TM1 with 280 PVU licenced. You then decide to increase the cores, so you shut it down, add some virtual cores and start it up. Ten minutes later you’re up and running with say 8 cores. Then along comes IBM and warns you that they will be doing and audit, so your admin then winds down the server back to the licenced 4 cores and IBM would never know any better when they audit.

IBM, of course, realise this and tuck into your Passport Advantage licence agreement a clause about sub-capacity licensing that says you must run the IBM Licence Metric Tool, ILMT, when you have virtual servers. ILMT records how many PVU are assigned to each virtual server so when you are audited, the auditors can check the logs and see that you have not wound the sub-capacity based server power up and down.

What is a PVU

A Processor Value Unit (or PVU) is an IBM metric of the power of a CPU or core. Typically most servers are assigned 70 PVU per core, however some are rated above 100 and others around 50. Server software from IBM is then licenced in PVUs, so for a 4 core, 70 PVU per  core server, you would require 280 PVU of server software.

If you need to confirm the PVU count of your server, please let us know.

What is ILMT

IBM’s Licence Metric Tool, ILMT, is a piece of software that sits on a master server. On each virtual server agents are then installed. The master server then polls those agents and stores server specification stats in a database. It is, therefore, IBM’s way of ensuring that you don’t breach your licence.

When must you run ILMT?

IBM state that:

The use of IBM License Metric Tool is recommended for Full Capacity PVU environments, and is mandatory for use with PVU sub-capacity licensing. Exceptions to this requirement are:

1. when ILMT does not yet provide support for the Eligible Virtualization Environment (In order to be notified when ILMT support for eligible virtualization technologies become available, customers need to subscribe to “My Notifications”.

2. if your Enterprise has fewer than 1,000 employees and contractors, you are not a Service Provider (an entity that provides information technology services for end user customers, either directly or through a reseller), and you have not contracted with a Service Provider to manage your environment, and the total physical capacity of your Enterprise servers measured on a full capacity basis, but licensed under Sub-Capacity Licensing terms, is less than 1,000 PVUs.

3. if your servers are licensed to full capacity.

What this means is that you must use ILMT when you have a sub-capacity (read virtualised) environment, except when:

  1. ILMT does not support the virtualisation environment, or
  2. If you have less than 1,000 staff, you’re not a service provider, nor have you contracted with a service provider and the sum of the PVUs on all your servers is less than 1,000, or
  3. You own licences to the capacity of the physical server.

Note it says all all enterprise servers, not just those with virtual servers with IBM server software installed.

What is your Exposure?

Another part of the Passport Advantage agreement says that if you don’t run ILMT and you have a “sub-capacity” environment (virtualisation), then you are liable for the difference between what you are licenced for and the physical host the virtual server sits on.

Therefore lets say that the physical server the above 280 PVU virtual TM1 server sits on is 32 cores. That represents 2,240 PVU. TM1 currently has a list price in Australia of $A345 per PVU. So if you were hit in an audit, IBM would claim (2,240-280)*$345, which is $A676k. Now they are probably not going to get that out of you because you will negotiate it down, but you’ll have a bunfight on your hands and it will take months of management time and significant angst to resolve.

More Information on ILMT

Obviously we are not IBM and your Passport Advantage agreement is between you and IBM, so you need to read and understand all the requirements of your agreement with IBM. This page is provided as general advice only and you should ensure you satisfy your licence requirements.

That being said, for more information on ILMT, please go to this IBM web page.

What do do now?

Get ILMT installed! You can do it yourself or you can get an IBM partner to come and install it for you. It’s free to download and it should take a couple of days to install and configure by someone who is experienced with it. It is a difficult tool to make work, so allow some time.

If you can’t get it working, reach out to your IBM rep and ask for their help. At least start the conversation so you are on the front foot with them them regarding vitalisation.

If you think that you fulfil the criteria for one of the exceptions, get it in writing from your IBM rep. Alert them now and keep the paper trail.

When they arrive to audit, it’s too late. They will sting you and it will hurt. A lot!

If you need more information, please let us know. It is not a matter of if you will be audited. It is when. Let’s work with IBM to get it sorted now!

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John Vaughan

John Vaughan is a highly experienced Accountant and Consultant. He has experience in the pharmaceutical, FMCG, distribution, professional services, manufacturing and financial service industries. With over 25 years of commercial experience and 20 years working with the Cognos products, he...

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