How to Calculate License Entitlements
- Identify software or service usage per user or device.
- Determine license requirements based on usage data.
- Compare entitlements against active licenses.
- Adjust based on license agreements and renewals.
- Track updates for compliance.
Step 1: Learn Different Licensing Metrics
IBM offers several licensing metrics, and the three most common are:
1. Processor Value Unit (PVU)
PVU licensing is based on the machine’s processing power installed by the IBM software. The PVU metric measures the licensing cost in proportion to the server’s power, typically calculated by the number of cores and their architecture.
- IBM assigns Processor Value Units (PVUs) to each processor core.
- The more powerful the core, the higher the PVU value.
- Different server architectures have different PVU ratings.
For example:
- A Power8 processor may have a rating of 120 PVUs per core, while an Intel Xeon processor may be rated at 70 PVUs per core.
PVU licensing is commonly used for server-based software, such as IBM WebSphere or DB2, where processing power is a good proxy for the capacity needed to run the software.
2. Resource Value Unit (RVU)
RVU licensing depends on the usage of specific resources. Instead of tying costs to server power, RVU licensing looks at the resource itself, which could be anything from the number of users to the number of applications accessing a database.
- Resource Value Unit is useful when usage depends not on the hardware but on specific activities or software components.
- Resources could be virtual machines (VMs), data volumes, or endpoints.
For instance:
- If you’re running IBM software to manage 100 endpoints, IBM may assign a specific RVU for each endpoint, and your total entitlement is calculated based on the sum of RVUs for each endpoint.
RVU-based licensing is often used when scaling to specific workloads, such as managing many endpoints or monitoring data flow between applications.
3. User-Based Models
These licenses are based on the number of users who access the software.
- Authorized User: This is for individuals allowed to use the software. Each user must have a license.
- Concurrent User: A license is required for each user to use the software simultaneously.
- Floating User: Licenses can float between users, but only a limited number of users can access the software simultaneously.
For example:
- If you have 15 people who may use the software but only 5 can use it at once, you may need 5 concurrent user licenses.
User-based licensing is commonly used for software accessed by many individuals, such as IBM SPSS or Rational Team Concert.
Understanding which metric applies to your IBM product is the first and most important step in calculating your entitlements.
Step 2: Identify the Software Deployment
The next step in calculating your license entitlement is identifying how and where the IBM software is deployed. This includes:
- Physical Server or Virtual Environment: Is your software running on a physical machine, a virtual server, or in a cloud environment?
- Number of Cores: How many processor cores are available in your server? This is especially important for PVU-based licensing.
- Number of Users: How many users are accessing the software, and what type of users are they? This matters for user-based models.
To illustrate:
- If you are using an IBM WebSphere Application Server on a server with 4 Intel Xeon cores, calculate the PVU for each core.
Example Scenario
Suppose you run IBM DB2 on a virtual server with 6 Intel Xeon cores. Each core has a PVU rating of 70 PVUs. The total number of PVUs you will need to license is:
- 6 cores x 70 PVUs per core = 420 PVUs.
Additionally, you need to know whether the server is running other virtual machines or containers, as each instance may require a separate license.
Step 3: Use IBM PVU Calculation Tools
For PVU-based licensing, IBM provides specific tools to help you calculate the necessary licenses.
One such tool is the IBM License Metric Tool (ILMT).
Using ILMT
- ILMT helps you track the PVU consumption automatically.
- It gathers information on the physical and virtual environments, calculates PVU consumption, and provides compliance reports.
- The tool should be installed in the environment where the IBM software runs and collects data at regular intervals.
Example Calculation:
- If your environment has four cores, each assigned 70 PVUs, your total entitlement would be four cores x 70 PVUs = 280 PVUs.
ILMT helps automate PVU tracking, maintain historical records, and generate accurate reports for IBM audits.
Manual Calculation (if not using ILMT):
- Check the PVU Table: IBM maintains a list of processors and their PVU values, which can be found online.
- Multiply by Number of Cores: Calculate the total PVU by multiplying the per-core PVU rating by the number of cores.
Manual calculations can be prone to errors, and it’s important to double-check all values against IBM’s official PVU tables regularly.
Step 4: Determine Resource Usage for RVU-Based Licensing
For RVU-based licensing, it’s important to determine the exact resource usage that IBM’s license requires.
This could mean understanding:
- The number of virtual machines using the software.
- The volume of data being processed.
- The number of endpoints managed by the software.
Example Calculation for RVU
Suppose you have an IBM product that requires 1 RVU per virtual machine:
- If you have 15 virtual machines using the software, each requiring 1 RVU, you need 15 RVUs.
Another scenario could involve data volume-based RVU calculations:
- If your IBM software requires 1 RVU for every 10 TB of data processed, and your database manages 50 TB of data, then you need 5 RVUs.
In some cases, RVU allocations for different types of resources are different. Always refer to the specific product’s documentation to understand how many RVUs are needed for each resource.
IBM also allows RVU conversion between certain products, simplifying entitlement management across multiple software solutions, especially in large-scale data centers.
Step 5: Calculate User-Based Licenses
User-based licenses are perhaps the simplest to calculate, but they still require attention to detail:
1. Authorized User License
- Count the Total Users who have access to the software, regardless of whether they are all using it simultaneously.
Example:
- If 50 employees are allowed to use IBM SPSS Statistics, you need 50 authorized user licenses.
This type of licensing can be effective when each user has a dedicated need for the software, and access cannot be easily shared.
2. Concurrent User License
- Count the peak number of simultaneous users at any time.
Example:
- If your peak usage is 20 users at a time, you need 20 concurrent user licenses.
Concurrent licenses can be an efficient way to manage costs if not all users need simultaneous access. Monitoring usage patterns can help ensure you have the right balance of licenses.
3. Floating User License
- Users can share these licenses, but only a limited number can use them simultaneously.
Example:
- If 10 licenses are available and 25 users can potentially use them, but only 10 will access it concurrently, 10 floating licenses are sufficient.
Floating licenses are particularly beneficial in large teams with intermittent usage, but multiple people need access at different times.
Tracking User-Based Licensing
Many organizations use license management software to effectively track user-based licensing. This software tracks authorized, concurrent, and floating user licenses, ensuring that licenses are used optimally and compliance is maintained.
Step 6: Factor in Virtualization and Cloud Environments
Virtualization and cloud deployments are common in today’s environments. IBM has specific licensing rules for these environments, especially for PVU and RVU models.
Virtualization Considerations
- If the software runs in a virtual environment, only the virtual cores assigned to the virtual machine count for PVU calculations.
- For RVU calculations, the number of resources allocated to that virtual machine must be tracked.
- Using ILMT is often recommended to track virtual core allocation and stay compliant automatically.
Example for PVU in Virtual Environments:
- If a virtual machine is assigned four virtual cores of an Intel Xeon processor rated at 70 PVUs per core, your PVU entitlement would be four cores x 70 PVUs = 280 PVUs.
Container Environments:
- Knowing how many containers are running and on which hosts is essential when running software in containerized environments such as Docker or Kubernetes.
- IBM typically considers each container an instance requiring separate licensing, making container orchestration crucial for license compliance.
Cloud Environment
If your IBM software is deployed in the cloud:
- IBM may require a Bring Your License (BYOL) model.
- You will still need to track the virtual cores or resources used.
- ILMT or another similar tool ensures that cloud resource usage aligns with your entitlement.
- Understanding the underlying infrastructure is essential for proper licensing in cloud platforms like AWS or Azure.
Hybrid Cloud Scenarios
Many organizations use a hybrid cloud approach, with software distributed between on-premises and cloud environments. In such cases, a combination of tools like ILMT and IBM License Management Service (ILMS) may be required for a complete view of usage across different environments.
Step 7: Regular Compliance Check
IBM licensing audits can be stressful, but conducting regular internal compliance checks can help prevent surprises. Here’s how to do it:
- Run ILMT Reports Regularly: Generate compliance reports using ILMT to compare your actual usage against your entitlements.
- Cross-Verify User Numbers: Ensure the number of users accessing software matches your licensing entitlements, especially for concurrent and floating licenses.
- Document Changes: Record all hardware and software changes, including the addition of new servers, decommissioning of old ones, or changes in the number of users.
- Plan for Growth: If your business expands, consider whether your current entitlements can accommodate this growth.
Audit Preparation Tips
- Keep Records: Maintain up-to-date records of all software deployments, including virtual environments, cloud instances, and user counts.
- Perform Trial Audits: Conduct internal audits to identify discrepancies before IBM does.
- Use License Management Software: Employ tools to help consolidate usage reports and provide detailed information for each deployment.
Common Pitfalls and Tips
Calculating IBM license entitlements can be complicated, and mistakes can lead to compliance issues and hefty fines. Here are some common pitfalls and tips to avoid them:
1. Not Using ILMT
- Pitfall: Manual PVU calculations can lead to human error.
- Tip: Always use ILMT or similar tools for accurate tracking and reporting.
ILMT ensures that all instances are accounted for, especially in dynamic environments where new VMs or containers might be deployed frequently.
2. Ignoring Virtualization Rules
- Pitfall: Assuming physical core counts apply in virtual environments.
- Tip: Be aware that IBM calculates licenses differently for virtualized environments. Always consider the allocated virtual cores.
3. Underestimating Resource Counts for RVU
- Pitfall: Not accurately counting the number of virtual machines or endpoints.
- Tip: Perform regular checks on the number of resources in use and compare the results with your RVU licensing agreements.
For example, an untracked endpoint in RVU calculations can lead to a discrepancy during an audit, resulting in unexpected costs.
4. Misunderstanding User Types
- Pitfall: Confusing authorization with concurrent user licenses.
- Tip: Ensure the user license type fits your organization’s needs and matches IBM’s definitions.
5. Inadequate Tracking of Cloud Usage
- Pitfall: Failing to track software usage in cloud deployments.
- Tip: Use tools to measure and monitor cloud environments’ usage to prevent licensing gaps.
IBM’s rules regarding cloud and virtual environments are strict, and compliance is only possible with continuous tracking and visibility into resource allocation.
6. Not Accounting for Software Upgrades
- Pitfall: Upgrading to a newer version of IBM software without considering license changes.
- Tip: Review the licensing terms for each upgrade. A newer version may have different licensing requirements.
For instance, an upgrade from IBM Db2 10.5 to Db2 11 may require changes in how entitlements are calculated, depending on new features or increased resource usage.
FAQ: How to Calculate License Entitlements
What is a license entitlement?
A license entitlement specifies the number of users or devices allowed to use a particular software under the license terms.
Why is license entitlement calculation important?
It ensures compliance and avoids penalties for overuse. It also helps optimize costs by preventing over-purchasing.
How do I start calculating license entitlements?
Begin by identifying active software licenses and usage for each one. Track user counts and devices.
What data should I gather for entitlements?
Collect data on users, devices, software installations, and usage patterns. This helps with accurate entitlement calculation.
How can I track license usage?
Use software asset management tools or manual logs to monitor and record software usage.
What happens if I exceed my license entitlements?
Exceeding entitlements may lead to fines, additional costs, or audits by the software vendor.
How often should I review license entitlements?
Check entitlements regularly, ideally monthly or quarterly, to keep up with changes in software usage.
Can I reassign licenses?
Yes, as long as the license terms permit it. Some licenses allow reassignment to different users or devices.
How does license type affect entitlements?
License types (user-based, device-based) define how many users or devices can access the software.
What tools can help with license entitlement calculations?
Asset management software like Flexera or ServiceNow helps track and calculate license usage.
Are all licenses entitled the same way?
No, entitlement calculations vary by license type, vendor, and agreement terms.
What are the risks of underutilizing licenses?
Underutilized licenses mean wasted resources and costs. Regularly assess and reduce unnecessary licenses.
Can I add licenses if usage increases?
You can purchase additional licenses to meet increased demand and keep usage compliant.
How do renewals affect license entitlements?
Renewals can adjust entitlements; ensure you understand any changes in allowed usage.
What’s the best way to stay compliant?
Regularly review entitlements, monitor usage, and adjust licenses as needed.
