How to Calculate IBM License Costs
- Identify the software and version.
- Review IBM’s pricing structure.
- Determine the number of users or processors.
- Calculate costs based on IBM’s PVU or VPC models.
- Consider additional costs like support and upgrades.
- Contact IBM or resellers for final quotes.
Overview of IBM Licensing Models
IBM licenses its software using different models based on the specific product and intended usage.
The most common licensing metrics include:
- Processor Value Unit (PVU)
- Resource Value Unit (RVU)
- User-Based Licensing (including Authorized Users and Concurrent Users)
Each model has its pricing structure, and calculating costs accurately requires understanding the underlying metrics.
Processor Value Unit (PVU) Licensing
A Processor Value Unit (PVU) is a licensing metric IBM uses to measure processing power on physical or virtual servers. Different types of processors are assigned different PVU values, which are used to determine the cost of licensing.
Step-by-Step Calculation for PVU Licensing
- Identify the Server Configuration
- Determine the type of processor being used. IBM assigns different PVU values based on the processor type.
- Examples of processors could include Intel Xeon, IBM Power, or AMD EPYC.
- Determine the PVU Value per Core
- IBM provides a PVU table that indicates the PVU value per core for different types of processors.
- For instance, an Intel Xeon processor might have a PVU value of 70 PVUs per core, while an IBM Power 8 processor might have 120 PVUs per core.
- Calculate the Total PVU Requirement
- Multiply the number of physical or virtual cores by the PVU value per core.
- Example: If you have an 8-core Intel Xeon server, the PVU requirement would be cores x 70 PVUs per core = 560 PVUs
- Determine the Cost per PVU
- IBM provides a cost per PVU for each software product. For example, the software’s cost per PVU is $50.
- Calculate the Total License Cost
- Multiply the total PVUs by the cost per PVU.
- Example:560 PVUs x $50 per PVU = $28,000
Key Points to Remember
- PVU values differ based on the type of processor. Always use the latest PVU table provided by IBM.
- Virtual Environments: PVU calculations can apply to virtualized environments, and understanding the underlying virtual setup is important for compliance.
Resource Value Unit (RVU) Licensing
The Resource Value Unit (RVU) model is used for products that depend on the capacity of hardware or resources. This could include metrics like the amount of data processed or the number of terabytes of storage.
Step-by-Step Calculation for RVU Licensing
- Identify the Resource Metric
- Determine the software’s specific resource metric. This could be the number of terabytes, processors, or memory.
- Determine the RVU per Resource Unit
- IBM assigns a specific RVU value per unit of resource. For a storage product, the RVU might be 1 RVU per terabyte of data.
- Calculate the Total RVUs
- Multiply the number of resource units by the RVU value per unit.
- Example: If you have ten terabytes of storage, and the RVU value is 1 RVU per terabyte, the total RVUs would be:10 terabytes x 1 RVU per terabyte = 10 RVUs
- Determine the Cost per RVU
- IBM provides a cost per RVU for each software product. Let’s assume the cost per RVU is $500.
- Calculate the Total License Cost
- Multiply the total RVUs by the cost per RVU.
- Example:10 RVUs x $500 per RVU = $5,000
Key Points to Remember
- Usage-Based Licensing: RVU licensing is often used for software products where licensing is based on resource consumption, such as storage or data processing.
- Regular Audits: It is essential to regularly audit resource usage to ensure compliance and avoid unexpected cost increases.
User-Based Licensing
IBM also offers user-based licensing models, primarily focusing on how many users will use the software. The two main types are:
- Authorized User: Each user who accesses the software requires a license.
- Concurrent User: Licenses are based on the number of users accessing the software simultaneously.
Step-by-Step Calculation for Authorized User Licensing
- Determine the Number of Users
- Identify the total number of users who will be accessing the software. For Authorized User Licensing, each individual requires a license.
- Example: If 50 users need access, you will need 50 licenses.
- Determine the Cost per User License
- IBM provides a cost-per-user license. Suppose the cost per user is $100.
- Calculate the Total License Cost
- Multiply the number of users by the cost per user license.
- Example:50 users x $100 per user = $5,000
Step-by-Step Calculation for Concurrent User Licensing
- Determine the Peak Number of Concurrent Users
- Calculate the maximum number of users who will be using the software simultaneously. This might require monitoring usage patterns.
- Example: If at most 20 users will be using the software concurrently, you will need 20 licenses.
- Determine the Cost per Concurrent User License
- IBM provides a cost per concurrent user license. Suppose the cost is $200 per concurrent user.
- Calculate the Total License Cost
- Multiply the number of concurrent users by the cost per license.
- Example:20 concurrent users x $200 per user = $4,000
Key Points to Remember
- Authorized vs. Concurrent: Authorized user licensing is suitable when the number of users is predictable. Concurrent user licensing works well when not all users will be active simultaneously.
- Cost Efficiency: Concurrent user licenses may be more cost-effective if the usage is staggered among multiple users.
Combining Licensing Models
Some IBM software products might require a combination of different licensing models, such as PVU plus user-based licenses. In these scenarios, it is important to calculate each component separately and sum up the total cost.
Example of Combined Licensing
- Suppose a product requires PVU-based licensing for the server and Authorized User licensing for the individuals accessing the software.
- You have a 4-core Intel Xeon server (each core = 70 PVUs) and ten users accessing the software.
PVU Cost Calculation:
- 4 cores x 70 PVUs per core = 280 PVUs
- 280 PVUs x $50 per PVU = $14,000
User License Cost Calculation:
- 10 users x $100 per user = $1,000
Total Cost:
- $14,000 (PVU) + $1,000 (User) = $15,000
Tips for Managing IBM License Costs
- Regular Monitoring: Continuously monitor your server and user usage to ensure you are licensing based on actual needs. This helps avoid over-provisioning.
- Optimization Tools: IBM’s tools, such as the IBM License Metric Tool (ILMT), can automate PVU and RVU tracking in complex environments.
- Audit Preparedness: IBM conducts periodic audits, so it’s essential to maintain accurate records of your deployments and license calculations.
- License Bundling: Consider whether bundled licenses (e.g., IBM Cloud Pak) offer a more cost-effective approach than individual licenses.
- Virtualization Considerations: Virtualized environments can significantly impact PVU and RVU calculations. Be sure to understand IBM’s policies on virtualization.
Common Challenges in Calculating IBM License Costs
- Understanding PVU Values: PVU values are not the same across all processor types, and keeping track of IBM’s updated PVU table can be challenging.
- Dynamic Environments: Tracking the required PVUs or RVUs can be complicated in environments where virtual machines are frequently added or removed.
- User Overlaps: In user-based licensing, calculating the true number of users can be difficult if people share credentials (which should be avoided).
FAQs: How to Calculate IBM License Costs
What factors impact IBM license costs?
IBM license costs depend on the software, user count, processor type, and pricing model (PVU or VPC).
How can I determine the license model for my software?
Check IBM’s documentation or consult IBM support to identify the applicable licensing model.
Do different software versions have different license costs?
Yes, older versions may have pricing structures that are different from those of the latest releases.
What is PVU, and how does it affect IBM license costs?
Processor Value Unit (PVU) measures processor performance, impacting pricing based on your hardware.
How do VPC licenses work for IBM software?
Virtual Processor Core (VPC) licenses are based on the number of virtual cores, primarily used for virtualized environments.
How are costs calculated for a small business?
Small businesses typically calculate costs based on the number of users or hardware specifications like processors or cores.
Are support and maintenance fees included in IBM licenses?
Support and maintenance are usually separate and must be calculated in addition to the software license.
Can I negotiate IBM license costs?
Yes, IBM or its resellers may offer discounts, especially for bulk purchases or long-term contracts.
What is the typical renewal period for IBM licenses?
IBM licenses are generally renewed annually, though some may offer multi-year options.
Does IBM offer flexible licensing options?
Yes, IBM offers perpetual, subscription-based, and cloud licensing options, depending on the software.
Are there penalties for non-compliance with IBM licensing?
Noncompliance can result in significant penalties, including fines and back payments.
Can I audit my IBM licenses myself?
IBM recommends regular self-audits to ensure compliance, but they may also conduct their audits.
How does cloud usage impact IBM licensing?
Cloud deployments are often priced based on VPC or other metrics tied to virtual environments.
What’s the difference between IBM’s license types?
With different pricing structures, IBM offers various license types, such as floating, user-based, or core-based.
Where can I get an official IBM license cost estimate?
For an accurate estimate, contact IBM directly or work with a certified IBM reseller to get a quote tailored to your needs.
