by | January 25, 2023

If your organisation uses IBM software, the following predictions I have made for 2023 will provide some food for thought as well as some useful advice.

This information will be available in two parts with this post focusing on the likely increase in IBM audits and on licensing changes.

Part II will focus on SAM tooling, cloud, partnerships, and ‘something’ which might be a huge play by IBM.

Let’s jump in.

Price increases lead to reduction in maintenance for IBM

The 24% increase in IBM software prices announced in December 2022 stunned a number of people across the software industry. My post published at the time outlined these price changes.

Organisations with a price protection clause in their contracts will be breathing a sigh of relief but a considerable number of IBM users will not. IBM customers should be taking a long hard look at what IBM software they are using to see if they can reduce it sufficiently to offset the price increase.

If you fall into the latter category, you should also consider whether you are using IBM licensing terms to your advantage as this may also result in significant savings you were not aware of.

IBM licensing is complex, yes, but policies such as the ‘Temporary Additional Use’ policy and others can make you huge savings without having to take up your technical teams’ time.

Reduction in maintenance leads to increased audit activity

When a customer is reducing the volume of software they pay maintenance for, this can often be a trigger for an audit.

I have seen audits initiated even where the volume of software in question is only small — IBM likely consider that this is revenue which is lost for good and that the total loss of revenue will be felt in the account across a number of years.

It is therefore worthwhile knowing your entire licensing position and understanding what exposures you may have in advance of making any changes to the volumes of software you are maintaining and raising your profile with the IBM auditors.

Increased audit activity can be achieved in many ways

IBM ‘audit’ activity can take a number of forms (as illustrated in my blog); from self-declarations using the IBM License Metric Tool (ILMT), ‘audits’ carried out under the IBM Approved SAM Provider Programme (IASP), to formal audits.

A number of the organisations who support IBM with the IASP and/or with formal audits have been driving recruitment activity for IBM licensing specialists presumably as they have some insight into the number of audits which are forecast.

I anticipate IBM will be gradually upping the ante to drive the customers to provide their ILMT reports, ‘inviting’ them to join the IASP or worst case sending out audit letters ahead of formal audits.

I am not sure how successful the IASP is proving to be in achieving IBM’s audit targets. The IASP was first released into the public domain in 2019 and a couple of years back IBM reported just shy of a hundred organisations had signed up. I believe IBM have invested in this programme and will push this further in 2023.

I also note that IBM and Anglepoint have been working increasingly closely together and it would not surprise me if Anglepoint were selected to join KPMG, Deloitte and Ernst & Young and started carrying out audits on behalf of IBM.

My advice on audits is to be wary of any information you release. IBM are a very mature organisation, large amounts of money are at stake and you may not even realise you are sharing information which is to your detriment.

Keep a close eye on licensing changes and put things in a safe place

IBM have recently revised the Software and Licensing Compliance website making the content a little more accessible, but it is wise to look upon this with a degree of caution.

Has this been done genuinely in the customers’ interest or has feedback from audits been that the existing materials were unclear to the average customer? Has this in turn slowed down audits or even put at risk monies IBM could have recouped?

I would urge you to keep a very close eye on any changes to IBM’s licensing documentation and be vigilant in any license conversations which are being proposed to you.

Using the Cloud Paks as an example, IBM radically developed these offerings from their original inception to what they are now.

I strongly suggest you keep copies of the content you were provided at the time of signing anything and any related correspondence. Having this in an audit situation can be gold dust to you.

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