Last year IBM forecast that Hybrid Cloud would be a $1 trillion market opportunity by 2020 and bet big with the acquisition of Red Hat. Two recent announcements highlight in different ways the building momentum behind Big Blue’s hybrid cloud strategy.

The first announcement was a big one. On Thursday last week IBM announced its intention to spin off its managed infrastructure services business as an independent company. After the split, the majority of IBM company revenues will come from software and solutions. CEO Arvind Krishna reflected that the decision builds on the successful acquisition of Red Hat and that now IBM is “going all in on our open hybrid cloud platform and AI solutions”. Announcement

Less noticed, but another important milestone in IBM’s shift towards a hybrid cloud future was the publication of new terms and conditions for licensing of IBM software in containerised environments. Container Licensing

Summary of changes

– To be relevant in a hybrid cloud world, IBM software has to run in containers. New licensing terms and conditions and metering tools are needed to reflect the specific characteristics of the containerised technology platforms.
– IBM software running on containers, whether either IBM Certified Containers or Cloud Paks, can now be licensed based on the metered vCPU capacity of the Kubernetes Pods on which the containers in which the software is running are deployed. Previously, license consumption in containers was measured according to the virtual processor cores allocated to the worker node (typically a VM) on which the Pods were deployed. The new measurements are more granular and should be advantageous to customers from a cost perspective
– Customers are required to accept an Addendum to the International Passport Advantage Agreement – Special Option for Container Licensing terms.
– These terms require customers to deploy a specific metering tool called License Service on all Kubernetes clusters on which IBM Eligible Container products are deployed, to produce quarterly reports and to retain them for at least 2 years.
– Customers which do not meet the Container Licensing requirements must license the full capacity of all servers in the Kubernetes clusters in which the Eligible Container products are deployed. This is likely to be significantly more expensive than licensing the metered vCPUs.

Challenges for customers:

– Cloud Paks can actually be deployed in either containerised or traditional sub-capacity environments. Most organisations are likely to try containerised environments in parallel to existing traditional environments. This creates a software asset management challenge in terms of tracking peak consumption over time using two separate metering technologies, ILMT in the traditional environment and License Service in containerised environments.
– Hybrid clouds are by definition made up of multiple public and private clouds. IBM Certified Containers and Cloud Paks are designed to be portable across clouds, and therefore the software can be running concurrently in multiple clouds in both traditional and containerised environments, as well as on premise.
– Cloud Pak licensing (separately to Container licensing) has some additional complexity due to the Cloud Paks containing multiple component products, each with its own license value.
– Customers will need to set CPU limits on each container. In the absence of CPU limits on any container, licenses will be required equal to the virtual processor cores of the whole worker node, which could be higher.

Tools to support customers in managing Container Licensing:

There is some good news though:

– The License Service tool is included in IBM Cloud Paks as part of the IBM Cloud Platform Common Services and runs automatically, requiring no separate deployment or configuration. For deployments on IBM Certified Containers, License Service can be downloaded separately and is easily deployed into the cluster.
– The IBM License Service Reporter tool is also available to support aggregation of metering from multiple Kubernetes clusters and clouds and from traditional sub-capacity environments metered by ILMT.
– From a contractual perspective there is no requirement for metering reports to be aggregated, although for tracking and monitoring your own compliance it is highly recommended to do so. License Service Reporter does require some configuration and all of the tools require regular checking to ensure they are operational and functioning correctly.

Conclusion: