Defense Contractor Saves $2 Million on IBM ELA Renewal

IBM ELA Renewal

Our client, a prominent international entity specializing in defense, aerospace, and security, serves both governmental and private sectors. With a longstanding partnership with IBM, they have invested substantially in IBM technology over recent years.  

As they approached the renewal of their IBM Enterprise License Agreement (ELA) in 2024, they sought assistance in comprehending their forthcoming needs over the next 3-5 years and preparing for negotiations with IBM. 

Challenges Faced 

The client encountered several hurdles in readiness for their IBM ELA renewal: 

  • Managing over 50 products, many utilizing non-PVU license metrics, necessitating intricate product knowledge to gauge license usage accurately. 
  • The organizational structure involved multiple business units and stakeholders whose input was crucial for determining current and future license requirements. 
  • Although the Software Asset Management (SAM) team was highly experienced, they lacked historical knowledge specific to the client’s operations. 
  • IBM’s request for a software license review for numerous products added complexity to the preparation process. 

Objectives 

The client’s objectives encompassed: 

  • Understanding their initial IBM license status for budgetary planning. 
  • Updating their license position for both PVU and non-PVU products. 
  • Gaining insights into their requirements for a new license position renewal. 

Our Approach and Project Execution 

We devised a phased approach to support the client: 

  • Initial Risk Assessment. 
  • Internal Audit. 
  • Optimization. 
  • ELA Renewal Preparation. 

Each stage contributed to continually refining the Effective License Position (ELP) and Bill of Materials (BOM) for the ELA renewal. 

The initial risk assessment swiftly produced a draft ELP and identified quick-win opportunities to reduce license demand.  

Subsequently, a detailed internal audit reviewed all IBM products, focusing on those with non-PVU metrics, and provided evidence for IBM’s review.  

The optimization stage identified areas of over-licensing, while the final stage prepared the client for the ELA renewal by verifying requirements with product owners and providing an optimized BOM to procurement. 

Challenges Overcome 

Several challenges were addressed throughout the project: 

  • The product administrators and owners were unsure what information needed to be collected for several non-PVU products. We provided them with detailed instructions and workbooks to collect the required usage data. 
  • It initially appeared the client was short of licenses for some BI products.  After interviews with administrators we were able to confidently remove the compliance risks estimated at over £1 million through license reallocation.  
  • The client wished to renew its IBM ELA earlier.  With our help, we were able to achieve this, producing the optimized requirements on time. 

“It was brilliant working with License Hawk on this project. The knowledge and experience they brought was invaluable.”

Head of SAM

Outcomes and Benefits 

The project yielded significant outcomes and benefits: 

  • Enhanced confidence in full license compliance, bolstering negotiation posture with IBM. 
  • Identification of over-licensed or redundant IBM products, resulting in savings exceeding $1 million. This was in addition to the compliance risk removed for other products, also exceeding $1 million. 
  • The client was able to reallocate saved funds for investment in new IBM products aligned with business needs. 
  • The client’s SAM team was empowered through training in IBM licensing and the provision of tools for ongoing license management. 

Conclusion 

The IBM ELA renewal project was a resounding success, delivering substantial cost savings exceeding $2 million. This achievement represents a tactical win for the SAM team and a strategic victory for the organization, aligning with their cost reduction targets. 

The project was successful, contributing directly to the client’s IT cost reduction objectives for the year. Further projects between the client and the License Hawk team are now underway as a result. 

Contact us at License Hawk to explore how we can assist in mitigating your IBM compliance risks.