Sub capacity licensing is the single largest source of saving and the single largest source of audit risk.
Eligibility, ILMT health, virtualization configuration, and PVU reporting all sit underneath every sub capacity claim. We validate the position end to end so the saving is real and the audit risk is gone.
Pay for the cores the software can use, not every core in the box.
Sub capacity licensing is the IBM mechanism that lets an enterprise pay PVU charges based on the virtual processor capacity available to the software rather than the full physical capacity of the host. On a 128 core host running an eligible product on a virtual machine capped at 8 vCPU, the entitlement obligation is computed on 8 cores, not 128. The savings on dense virtualization estates are substantial and often the single largest line item in any IBM optimization roadmap.
Sub capacity is not a default. It is a conditional benefit granted under the IBM International Passport Advantage Agreement. To claim it lawfully, the customer has to meet a set of specific conditions on product eligibility, virtualization technology, reporting tool, and report retention. Miss any of those conditions and IBM is entitled to recompute charges at full capacity. The difference between the two positions is what audit findings turn on.
The diagnostic we run looks at the four conditions in order. Eligibility is the first because it is binary. Reporting is the last because it is the condition most enterprises fail. Read the firm methodology on the license consulting page for context.
What sub capacity requires.
- The product is on the IBM eligible sub capacity list.
- The virtualization technology is on the IBM approved list.
- ILMT is installed and reporting against the eligible products.
- Sub capacity reports are generated and retained for two years.
How we validate a sub capacity claim end to end.
Product eligibility verification
Cross check every PVU based product against the current IBM sub capacity eligible product list. Distinguish products that are eligible everywhere from products that are eligible only on certain processor architectures or only under specific edition combinations. Many estates carry a small number of products that look eligible by category but are not eligible by SKU.
Virtualization technology mapping
Map the deployed hypervisor and partition technology in the estate against the IBM approved virtualization technologies list. VMware ESXi, PowerVM LPARs, AIX WPARs, KVM, Hyper V, Solaris Zones, and zVM each appear on the list with specific version floors and configuration constraints. A LPAR pinned to a shared processor pool is not the same case as a dedicated LPAR.
ILMT health and reporting completeness
Validate that ILMT is installed, current, scanning the right targets, and generating the quarterly sub capacity report that IBM requires. Verify that the prior four quarter reports exist and are retained. Read the ILMT expertise page for the deeper diagnostic.
Peak high water mark reconciliation
Reconcile the highest reported PVU consumption per product in the prior four quarters against the corresponding entitlement. Flag products where consumption exceeded entitlement at any peak, even briefly, because that is the figure IBM will compute against in an audit.
Where sub capacity claims most often break.
ILMT installed but stale
The tool was installed years ago, never upgraded, and is scanning a fraction of the eligible footprint. Reports exist but are not credible. IBM treats this as no ILMT.
Reports missing for a quarter
A team change, a tool migration, or a service outage left one quarterly report missing. IBM is entitled to compute full capacity for the missing quarter.
Unapproved hypervisor
A virtualization technology not on the IBM approved list was introduced for one workload. That workload is full capacity even if every other workload is compliant.
Cloud move outside terms
A move from on premises to a public cloud changed the eligibility status for some products. The cloud sub capacity terms are stricter than the standard list.
PVU table out of date
A new processor family is in the estate but ILMT is using an outdated PVU table. The reported value undercounts the obligation. The audit team will spot this.
Container deployment unrecorded
A move to OpenShift or Kubernetes shifted the deployment surface, but the entitlement model still assumes the previous deployment. See Cloud Paks.
How clients think about sub capacity validation.
How quickly can we get a credible read on our sub capacity position?
Two to four weeks for the diagnostic. Six to ten weeks if we are also remediating ILMT or rebuilding missing reports. We can usually scope a credible savings band after the first week.
What if ILMT has never been deployed?
You are technically at full capacity until ILMT is deployed and the first quarterly sub capacity report is generated. Retroactive sub capacity is not allowed. We sequence the remediation so that the prospective saving starts the next quarter.
Does sub capacity apply on AWS, Azure, or Google Cloud?
Yes, with conditions. IBM publishes a separate eligible public cloud sub capacity scheme. The conditions on ILMT, on reporting, and on the eligible hypervisor list are stricter. The diagnostic includes a cloud sub capacity review where relevant.
Is sub capacity the same as virtualization licensing?
It is the IBM specific implementation of virtualization licensing. The general principle is similar to other vendors. The conditions are IBM specific and the reporting obligation is unique to IBM.
Will an IBM audit accept our internal asset management tool reports?
No. IBM accepts only ILMT or, in narrow recent cases, the BigFix Inventory equivalent that ILMT relies on. Snow, Flexera, ServiceNow SAM are not accepted as sub capacity reporting tools.
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