Transferring IBM Licenses in M&A
Introduction
Mergers, acquisitions, and divestitures often shine a spotlight on IBM software licenses – and it’s not always a pleasant surprise. IBM licenses can complicate deals if not handled proactively. Unlike office furniture or other assets, IBM software entitlements don’t automatically move with the business.
Transfers, co-terminating support agreements, and contract novations all require IBM’s direct involvement and approval. Without a clear plan, companies risk compliance gaps, unexpected fees, or even software downtime during a corporate transition.
In this guide, written from the perspective of an IBM licensing strategist, we’ll break down IBM’s strict transfer policies, highlight opportunities to align contracts (and score better deals), navigate carve-outs in a spin-off, and outline negotiation tactics.
Whether you’re consolidating two enterprises or carving one into two, understanding these IBM contract challenges can turn a licensing headache into a strategic win. Read our comprehensive guide to Managing the IBM License Lifecycle: Co-Termination, Ramp-Ups, and True-Downs.
IBM Policies on License Transfers (IBM License Transfer in a Merger)
IBM’s default position on software licenses in a merger or acquisition is non-transferability without consent. Under the IBM Passport Advantage agreement (the standard IBM licensing program), customers cannot simply “hand off” or assign licenses to another company as part of a deal.
In other words, if Company A acquires Company B, B’s IBM software licenses do not automatically belong to A. IBM requires written approval and a formal transfer process before those licenses can change ownership.
Typically, this involves notifying IBM of the merger or acquisition and submitting a License Transfer Request or similar documentation detailing the business change.
IBM’s Consent and Process:
Gaining IBM’s approval is not a rubber stamp – it’s a discretionary review. IBM will examine the request to ensure it aligns with contract terms and its policies. Both the seller (original licensee) and the acquirer usually need to sign IBM’s transfer paperwork (often a formal transfer or novation agreement).
IBM then countersigns or provides written consent. Until this happens, any continued use of IBM software by an acquiring company (or any new entity) that isn’t the original licensee can be considered unlicensed usage.
In practical terms, that’s a compliance violation, giving IBM the right to audit and demand license fees or penalties. Always assume IBM approval is mandatory – because it is.
Novation vs. Assignment:
From IBM’s perspective, a simple assignment clause in the merger agreement isn’t sufficient. IBM typically insists on a contract novation or equivalent – effectively placing the licenses under a new agreement in the name of the surviving or acquiring entity.
The Passport Advantage enrollment for the acquired company may need to be merged into the acquirer’s agreement or replaced entirely. This means the new owner steps into a direct contractual relationship with IBM for those licenses, rather than just inheriting the old contract by default.
It’s not uncommon for IBM to require the acquirer to sign a fresh Passport Advantage agreement or addendum, even if the licenses are perpetual, to formalize the transfer.
Read how to leave IBM support, Exit Strategies: Sunsetting IBM Software and Avoiding Ongoing Fees.
Subscription & Support (S&S) Contracts:
License transfers aren’t the only concern – support contracts need attention too. IBM’s Software Subscription and Support (maintenance) does not automatically transfer to a new owner.
Suppose one company has been paying annual support and services (S&S) on an IBM product, and that product is now being transferred to another company. In that case, IBM will require a separate novation of the S&S contract or a new support agreement for the new owner.
In practice, the acquiring company or spin-off must establish support in its own name; IBM doesn’t allow splitting or “gifting” support coverage without formal approval.
Failing to novate support means the software might technically be unsupported after the business change, or the original company might continue paying for support on software it no longer uses – both undesirable outcomes.
Always coordinate support transfers with IBM as part of the deal.
Limits on What Can Be Transferred:
Note that not all IBM entitlements are transferable even with consent. Perpetual licenses (the kind you buy once and own) are usually transferable with IBM’s approval. However, subscription licenses or cloud services (recurring entitlements) often cannot be transferred at all under Passport Advantage rules.
For instance, if the acquired business had subscription-based licenses (or IBM SaaS subscriptions), IBM’s policy might require the new owner to re-purchase those subscriptions under their own account – you can’t just change the name on the contract.
Always review the type of licenses involved; if they are non-perpetual or tied to a specific cloud account, plan to re-license those for the new entity.
Internal Restructuring vs. External Transfer:
One small silver lining – if the license transfer is within the same overall company (say you’re moving licenses to a subsidiary that you fully own, or consolidating two internal divisions), the process may be simpler.
IBM’s definition of an “Enterprise” in Passport Advantage covers majority-owned subsidiaries, so moving licenses within entities that are all under the same corporate parent might be handled as a site consolidation rather than a formal external transfer. In these cases, IBM still wants to be notified, but they have a form for transferring entitlements within the same enterprise.
Essentially, IBM will let you migrate licenses from one Passport Advantage site to another inside your organization fairly routinely.
However, if the move is outside your corporate family (e.g., to a buyer or a spun-off company that won’t be majority-owned), then it falls under the strict ‘no transfer without consent’ rule described above.
When in doubt, engage your IBM account rep early and clarify whether your scenario is considered an internal move or an external transfer – and get everything in writing.
Co-Term Opportunities in M&A (Align IBM Renewal Dates)
While IBM’s rules can feel like roadblocks, a merger or acquisition also creates an opportunity to streamline and save. One key strategy is co-terming, or aligning contract dates and consolidating agreements.
When two companies combine, you often end up with multiple IBM Passport Advantage contracts, each with its own renewal anniversary date for support.
Rather than continue to manage disparate renewal cycles, the merged entity can work with IBM to consolidate renewals to a single date.
IBM Passport Advantage is designed to accommodate this: enterprises can have a single agreement anniversary each year when all Software Subscription & Support renewals come due together. New purchases can be prorated or adjusted to sync with that common date.
Benefits of Co-Terming:
Aligning all IBM support renewals to a single calendar date simplifies administration and budgeting – but it also enhances your leverage.
A single, large renewal once a year provides a more significant negotiation opportunity with IBM. Instead of two smaller renewals where each might not qualify for a volume discount, the combined renewal spend could push you into a higher volume discount tier under Passport Advantage. (IBM uses a tiered point system – a larger purchase at once can mean a better discount percentage on licenses and support.)
In essence, a larger footprint and a unified renewal mean you can demand better pricing. IBM knows you have the option to rationalize software post-merger (perhaps even drop some IBM products), so they’re often willing to offer concessions to keep all that business in one contract.
Consolidating Passport Advantage Agreements:
Practically, co-terming during M&A often involves consolidating multiple Passport Advantage agreements or sites. If each company had its own Passport Advantage ID, IBM will generally merge them under one master agreement for the new combined enterprise.
This may require filling out a Migration and Consolidation form through IBM. The process involves migrating the acquired company’s entitlements into the acquirer’s Passport Advantage agreement (or vice versa, or both into a new agreement for the merged entity).
By consolidating, you effectively create a single contract, a single anniversary date, and a unified set of terms going forward. IBM typically assigns a new or existing Passport Advantage site number to the acquired licenses as part of this process.
From then on, the new entity’s purchases and renewals are aggregated, unlocking the higher discount levels that come with higher purchase volumes.
Enterprise License Agreement (ELA) Possibilities:
If the merger creates a significantly larger company or a more complex IBM software portfolio, it might be a good time to explore an IBM Enterprise License Agreement.
An ELA is a custom deal that covers a bundle of IBM products (often unlimited or a large fixed quantity) for a fixed price, usually over a few years. Merging entities can use their increased scale as a bargaining chip. IBM loves to upsell ELAs during major transitions – it’s a chance for them to cement your combined spending into a single contract.
If you play it right, you could negotiate an ELA that co-terms all existing licenses and support, adds any new licenses you need for the integrated environment, and does so at a significant discount compared to piecemeal purchasing.
For example, if Company A and B each were spending $500k/year on IBM, IBM might offer an ELA for the new Company AB at, say, $800k/year that covers everything both had, plus room for growth – effectively giving a price break and simplicity.
The key for you is to ensure the ELA’s terms account for all current usage and any integration plans (so you’re not caught short or paying for unused licenses). Remember: a merged organization has negotiation clout – more than either entity had alone.
Co-Terming Considerations:
When aligning renewal dates, be mindful of timing and costs. If one contract’s renewal is far off, IBM can prorate the maintenance fees so that they are shortened or extended to meet the other contract’s date.
Be clear on any prorated charges or credits involved – for instance, if Company B’s support was paid through December and Company A’s renews in June, IBM might extend B’s support six more months (for a fee) to co-term in June, or vice versa.
These adjustments are usually straightforward, but ensure IBM documents them so you don’t accidentally double-pay.
Additionally, verify that all products and metrics match up under the consolidated agreement. Sometimes, different companies had slightly different licensing metrics or terms for the same IBM product.
When you consolidate, you may need to reconcile those (IBM might default to both the latest terms). Use the co-term process as an opportunity to clarify entitlements, eliminate duplicates (retire redundant software if both have overlapping tools), and solidify any special terms you need going forward.
Divestiture and Carve-Out Challenges (Moving Licenses to Another Company)
Divestitures – whether spinning off a business unit or selling a division – pose a mirror-image challenge: instead of combining two pools of IBM licenses, you’re trying to split a pool apart. Moving licenses from one company to a completely new or separate company is delicate under IBM’s rules.
From IBM’s perspective, once that business unit is no longer part of the original customer’s “Enterprise,” it has no rights to the parent’s licenses unless IBM agrees to transfer or duplicate those entitlements.
Here’s what to watch out for in a carve-out scenario:
Defining What Moves:
The first step is to define exactly which IBM software and how much of it the divested entity (NewCo) will need.
In an ideal scenario, the division being sold had its own IBM licenses tracked under a separate Passport Advantage site or agreement. If so, IBM’s divestiture process allows those entire sites to be transferred wholesale to the new company’s account (much like transferring a title).
The seller, buyer, and IBM all approve moving that Passport Advantage site from the old enterprise to the new one.
This is the cleanest case: NewCo essentially continues with the licenses it already used, under its own new agreement with IBM, and the parent company removes that site from its records.
However, reality is often messier. Frequently, the departing business unit would share IBM licenses from the parent’s central pool, or its software deployments would be intertwined with those of the parent. Carving out entitlements then becomes a complex task. IBM will require the original company (Seller) to identify each specific license entitlement that needs to be transferred.
This means listing out software part numbers, quantities, and the associated support coverage dates that should go over to NewCo. IBM and both parties will then have to agree, via a formal transfer document, on splitting those entitlements. IBM’s approval here is again discretionary – they will only allow a split if it’s clearly documented and both companies agree on who gets what.
IBM’s Divestiture Process:
IBM has a dedicated process for divestitures, usually initiated by the Seller’s IBM representative. It often involves a “License Transfer Letter” or similar agreement that all three parties sign.
Once IBM approves, their Passport Advantage team will transfer the specified entitlements from the Seller’s account to a new or existing account for NewCo.
Note that IBM might also issue new license keys or update sales order numbers, especially if license keys were tied to the original owner’s account – the new company needs its own keys and proof of entitlement.
It’s critical that, after the dust settles, NewCo has proper Proofs of Entitlement (PoEs) for all IBM software it received. The parent company’s records indicate that those entitlements have been removed.
Challenges and Risks:
A major challenge in a carve-out is ensuring that both parties remain compliant and operational. If something isn’t accounted for, you risk one company running software without a license, or one company paying for licenses it no longer uses.
A common pitfall is shared infrastructure: suppose the divested unit used an IBM program that was installed on a server still with the parent. Post-separation, that usage is essentially “third-party” from IBM’s view (since the server’s company and the user’s company differ).
Without a transition agreement, that’s not allowed. Similarly, if the divested unit partially used an IBM license, splitting the usage might leave both sides under-licensed unless new purchases are made.
There’s also the issue of pricing: the new, smaller entity will likely lose the volume discount level the parent enjoyed. NewCo might have to pay higher annual support fees (since IBM support pricing can be tied to your discount tier or contract type).
In some cases, IBM might even treat the spin-off as a brand new customer, meaning any special deals or grandfathered terms the parent had won’t carry over.
For example, if the parent had an ELA or a bulk discount on a product, NewCo may have to negotiate afresh and could end up with higher per-unit costs.
IBM often requires that the divestiture be an opportunity to re-price the arrangement for the new situation.
This isn’t done out of spite; it’s just how their commercial model works – a smaller enterprise doesn’t qualify for the same discounts a big one does. The spin-off should be prepared for potential cost increases in maintaining the IBM software environment independently.
Transitional Service Agreements (TSAs):
Most divestitures involve a period of transition during which the seller continues to provide certain IT services to the buyer (typically for a few months or a year) while the new company establishes itself. IBM software licensing can clash with TSAs because IBM generally prohibits one company from using its licenses to benefit a third party.
Running a divested unit’s applications on the parent’s IBM-licensed software post-closing is technically a license violation unless IBM grants permission. The good news is IBM is usually willing to accommodate this via a transitional use agreement.
As part of the divestiture planning, you should request a temporary licensing arrangement from IBM, allowing the parent to support the new company (or vice versa, less commonly) for a defined time period.
IBM may issue a written authorization or addendum for this “dual use” period, which is often limited to 6 or 12 months. This ensures continuity of business without putting either party at risk of breach. Keep in mind that this is something you must proactively negotiate – don’t assume it’s fine to continue sharing systems after the legal split.
Carve-Out Execution:
To do a divestiture right, collaboration is key. The selling company should start the IBM transfer process early, ideally as soon as the deal looks likely.
Work closely with IBM to detail which licenses NewCo will get. Conduct an internal audit of the division’s IBM usage so you know what needs to be transferred (and check if any of those licenses are partially used elsewhere).
Likewise, identify any licenses the departing unit used that cannot be transferred – for those, plan for NewCo to obtain new licenses. Budget for these in the deal; often, the purchase of new IBM licenses for a spin-off can be a significant cost that needs to be negotiated between buyer and seller.
Finally, update all contracts: the parent should remove the transferred licenses from its support renewals (so it’s not paying maintenance in the future), and the new company should sign its own Passport Advantage enrollment and support contracts for the licenses it’s taking with it.
IBM will issue quotes for NewCo’s support prorated from the transfer date. It’s a lot of administrative detail, but skipping any of it can leave one or both companies facing an IBM compliance audit down the road.
Negotiation Angles (IBM Contract Novation and Upsides)
Every M&A event is not just a compliance hurdle – it’s also a negotiation table with IBM. The software licensing changes required by a merger, acquisition, or divestiture give you leverage points if you approach them strategically.
Here are several angles to consider:
- Leverage Increased Scale (for Mergers/Acquisitions): If your company is getting bigger (combining two IBM customers into one), use that fact to press for volume discounts and better terms. IBM values bigger customers – your combined IBM spend will likely put you in a higher tier or at least give you the power to say, “We’re now one of your larger clients, we expect better pricing.” Don’t be shy about asking for improved discount levels on licenses and renewals. If IBM initially just offers to transfer everything as-is, you can counter with, “We want to consolidate and co-term, but we also expect a pricing review given our new volume.” This could result in lower ongoing support costs or even credits on purchases if negotiated well. One common tactic is negotiating price protection on licenses for a year or two, or locking in the current discount level even if one contract was smaller – essentially asking IBM to treat all your licenses at the most favorable tier among the two companies.
- Consider an Enterprise License Agreement (ELA): As mentioned earlier, an ELA can be a valuable solution following a merger. IBM might propose a new enterprise agreement that covers the entire merged entity’s needs. This can be beneficial if you ensure it’s scoped right. Use the situation to your advantage: evaluate whether an ELA would actually save money or provide the needed flexibility (such as unlimited use of certain products). If yes, negotiate aggressively – IBM will try to upsell, but you hold cards too. For example, you might say, “We’ll consider a three-year ELA that combines both companies’ licenses, but we need a significant discount and the inclusion of these additional products or cloud credits.” Keep in mind, IBM sales reps are often eager during M&A because they fear losing out if you decide to consolidate and cut some IBM software. This is a prime time to secure favorable terms that would be harder to get otherwise.
- True-Down Opportunities (for Divestitures): In a divestiture, your company (the seller) might be shrinking its IBM usage. This can be a moment to reduce costs – but only if you negotiate it. IBM typically doesn’t volunteer to lower your bill when you have fewer licenses (especially if you’re mid-contract or mid-subscription). However, you can attempt to negotiate a “true-down” or reduction in entitlements due to the changed circumstances. For instance, if you sold a division that used 1,000 PVUs of WebSphere, you might ask IBM to allow you to terminate support on those 1,000 PVUs without penalty, since that usage is leaving. IBM might agree if the alternative is you contemplating dropping IBM products entirely for that part of the business sale. Another angle is to negotiate a credit on future purchases or support to account for the reduced scope. The key is to raise the issue – IBM won’t usually proactively cut your costs, but they may respond to a well-justified request, especially if the contract didn’t foresee the divestiture. If you have an ELA, check if it includes provisions for divestiture; some large agreements permit partial termination or fee adjustments if you divest a business unit. If not, you can still bring IBM to the table to discuss an amendment.
- Prorated and Flexible Support Terms: During any corporate change, you might need to adjust support contracts mid-stream (co-terming renewals, or splitting support into two contracts for a spin-off). Use this as a negotiation point. Request IBM to prorate maintenance fees fairly and provide flexibility on renewal dates. If, for example, a spin-off is taking some licenses, perhaps you can negotiate that they don’t have to pay support until the next common renewal cycle, to simplify things. Or, if you’re aligning two companies’ support contracts, perhaps IBM can offer a slight extension on one contract at no additional charge to align the dates (worth asking – sometimes they’ll accommodate in the interest of simplicity and customer goodwill). Additionally, when negotiating new support contracts for an acquired or divested entity, push for co-termination from the outset and strive to maintain any prior loyalty discounts. IBM might say, “NewCo doesn’t have a purchase history, so no discount on support,” but you can argue that continuity of business should grant some consideration. At a minimum, ensure that any support already paid by the original owner is recognized. If the seller paid maintenance through year-end, the buyer should get credit for that period – negotiate that IBM honors the remaining term so the new owner isn’t paying double.
- Avoiding Compliance Surprises: IBM has a habit of auditing companies after mergers or splits, knowing that these events can create compliance gaps. You can negotiate from a position of strength by addressing this head-on. For instance, when discussing license transfers, include a clause or understanding with IBM that once the transfers are complete, IBM acknowledges that those licenses are properly licensed under the new entity. Basically, get IBM’s buy-in that you’re taking the right steps. This won’t stop an audit, but it can serve as evidence that you sought IBM’s guidance. In some cases, companies have even negotiated a short-term audit moratorium – asking IBM not to audit for, say, 6 months post-merger, in exchange for full transparency during the transfer process. IBM might not formally agree, but showing that you’re proactive could make them more cooperative rather than adversarial.
- Utilize Competitive Options (carefully): If appropriate, subtly remind IBM that during a merger integration or a divestiture re-platform, you have options to possibly replace some IBM software with alternatives. This should be done tactfully – it’s not a threat, but a note that “we are evaluating our combined software landscape for efficiency.” IBM would prefer you stick with their stack and maybe even buy more. If they sense that being inflexible on transfers or pricing could prompt you to migrate to a competitor (or drop IBM in certain areas), they may become more accommodating. For example, if a divested unit might switch to a different database to avoid a costly new IBM purchase, IBM might come back with a discounted offer to keep them as a customer. Always maintain a professional tone in these discussions – the goal is to make IBM want to accommodate you, not alienate your IBM reps. But remember, IBM’s first answers are not always their last – almost everything can be negotiated when millions of dollars of software are in play.
In summary, M&A events involve negotiations with IBM. The vendor knows you’re in flux and will try to protect and grow their revenue – you should try to protect and reduce your costs or improve your terms.
Bring IBM to the table early, show them the roadmap of what you’ll need (and what you might not need), and drive the conversation toward win-win solutions: you get contractual flexibility or cost savings, and IBM retains a loyal customer through the change.
Comparison Table: Merger vs. Acquisition vs. Divestiture
To recap the nuances, here’s a quick comparison of IBM’s approach and recommended strategies in a merger, an acquisition, versus a divestiture:
| Scenario | IBM Policy | Risks | Negotiation Strategy |
|---|---|---|---|
| Merger (two companies combine) | Requires consolidating IBM entitlements under one owner. IBM insists on formal transfer approval to merge license pools. Typically one Passport Advantage agreement will survive (or a new one created). | Overlapping licenses or duplicate entitlements might cause compliance issues if not reconciled. Without formal license merging, the new entity could inadvertently use software it’s not entitled to. Mergers often trigger IBM audits due to the complexity. | Proactively combine contracts and co-term support dates. Use the larger combined spend to push for volume discounts or an ELA covering the merged enterprise. Ensure IBM provides written approval for any interim use of each other’s licenses during integration. |
| Acquisition (Company A buys Company B) | IBM mandates written consent to transfer B’s licenses to A. The transfer process (novation) must be completed for A to legally use B’s IBM software. Support contracts from B must be novated or re-established under A’s name. | If IBM approval isn’t obtained, A may be using B’s software without a valid license – a serious compliance violation. Any non-compliance B had (unlicensed use, missing ILMT data) becomes A’s inherited risk once the business is one. There’s also risk of paying maintenance twice if contracts aren’t merged properly. | Engage IBM early to initiate license transfers. Conduct thorough due diligence on B’s IBM entitlements and deployments to identify shortfalls before IBM does. Negotiate consolidation of Passport Advantage IDs into one; ask for a better discount tier now that A’s account includes B’s licenses. If B had favorable pricing or terms, push IBM to honor those in the new combined agreement. |
| Divestiture (spinning off or selling a division) | IBM’s divestiture process is required to carve out licenses. Only whole entitlements can be transferred; otherwise the new entity likely must purchase its own licenses. The spun-off business must sign a new IBM agreement (no automatic rights from the parent). IBM often requires the new entity to accept current pricing and terms. | The new company might not have the licenses it needs if transfers aren’t done, leading to stalled operations or emergency purchases. The parent could end up non-compliant if the spin-off continues using software “under” the parent’s licenses after separation. Cost risk: the spin-off may pay more for support and licenses at lower volume, and the parent might be stuck with unused licenses (or commitments) it can’t drop. | Identify every IBM product the new entity uses and coordinate with IBM to transfer what can be moved. For any licenses that can’t be transferred, negotiate a fair deal for the new company to acquire replacements (possibly ask IBM for a transition discount to get them started). Use the divestiture to renegotiate the parent’s contract too – for instance, reduce your license counts and support costs going forward since your environment is smaller. Also, formalize any transition period in writing so both companies can legally use needed software until the separation is complete. |
FAQs — IBM Licensing in M&A
Q: Do we need IBM’s consent to transfer licenses?
A: Yes. IBM’s Passport Advantage terms require obtaining IBM’s written approval before any license can be transferred to another company. You cannot legally move licenses in an M&A deal without IBM’s consent.
Q: Can we keep the same Passport Advantage number post-merger?
A: Not exactly. In a merger, IBM typically consolidates multiple Passport Advantage agreements into a single one. You’ll end up using one agreement (with one Passport Advantage ID or site) for the combined entity, rather than keeping both companies’ original account numbers active in the long term.
Q: Do support contracts transfer automatically to a buyer or spin-off?
A: No. Subscription & Support (maintenance) contracts do not transfer by default. The new owner must establish support contracts in their own name (often via a novation agreement or new quote from IBM). Without doing this, support coverage lapses when the original company is no longer entitled to support on behalf of the new entity.
Q: Can a divested entity keep the same IBM pricing and discounts the parent had?
A: Typically not. When a business unit is spun off, IBM treats it as a new customer. The old volume discounts or special pricing of the parent company usually won’t carry over. The new entity will likely get a new contract at pricing reflective of its smaller size, at least initially. However, it can try to negotiate better terms as it grows.
Q: Is an M&A event a good time to renegotiate IBM terms?
A: Absolutely. IBM is often open to renegotiation during mergers, acquisitions, or divestitures because it wants to retain and possibly expand its business. This is an ideal time to request items such as better pricing, an ELA, contract flexibility, or adjustments to reflect your new environment. IBM knows your IT landscape is shifting, so they expect these conversations.
Read about IBM ramp-up pricing, Ramp Pricing in IBM Deals: Aligning License Costs with Usage Over Time.
Five Recommendations — M&A Licensing Strategy
- Always Secure IBM Consent: Never assume licenses transfer automatically. Always get IBM’s written approval for any entitlement transfer – it’s the only way to stay compliant when corporate ownership changes. No approval, no valid license transfer.
- Use Mergers to Co-Term: Take advantage of a merger to align all IBM contract dates. Consolidate support renewal dates into one co-term anniversary. A single renewal not only simplifies management but also gives you a bigger bargaining chip for discounts.
- Push for an ELA: When your company grows via M&A, consider negotiating an Enterprise License Agreement. A well-structured ELA can unlock bigger discounts and broader rights for the new combined entity. Utilize your increased scale to secure a comprehensive deal that encompasses all your IBM software under one umbrella.
- Carve Carefully in Divestitures: If spinning off a unit, plan the IBM license carve-out with meticulous care. Ensure the new entity has the necessary licenses on day one (via transfer or new purchase) and that the parent company removes or rescinds rights it no longer needs. Double-check no one is left short on licenses – or stuck with surplus they can’t use.
- Re-Negotiate S&S Terms: Don’t carry on with status quo maintenance contracts during major transitions. Work with IBM to renegotiate subscription and support terms so they align with your new reality. This could involve cutting redundant support, aligning all support contracts to avoid overlaps, and securing prorated adjustments to ensure you’re not overpaying. Always aim to eliminate duplicate costs and get support contracts realigned as part of the deal.
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