Background
To buy IBM licenses you will need to enrol in either the IBM Passport Advantage Express (PAX) or IBM Passport Advantage (PA) programs.
The IBM Passport Advantage Express (PAX) program is used by organisation who are buying relatively small quantities of IBM software. It is simple, transaction based and there is a single price level.
Buying IBM software through IBM Passport Advantage (PA) is for larger organisation who are buying larger quantities of software license, more frequently. Discounts are available. Discounts are defined in PA under what are called Relationship Suggested Volume Price (RSVP) levels.
What are Relationship Suggested Volume Price (RSVP) levels?
When you buy an IBM product through Passport Advantage you can avail of discounts based on your Relationship Suggested Volume Price (RSVP) level. The RSVP is recalculated after each transaction and includes all transaction for eligible products (EP) under the same agreement. The anniversary date is based on the date of the first transaction under that agreement for that site.
Each PA site is treated as a separate agreement and hence will have a different anniversary date and different RSVP levels depending on how large the number of transactions.
The IBM License Discount, RSVP levels are explicitly defined in your Passport Advantage agreement. The table below summaries the price level and required points.
The more transaction value under one agreement the higher the potential discount levels and savings.
NOTE: IBM do not officially publish the actual % discount but from our analysis we have established the average % discount for each level and included that in the table below.
| IBM Passport Advantage Relationship Suggested Volume Price (RSVP) levels | ||
| Price Level | Points | Avg % discount |
| BL (Base level) | 0-500 | 0% |
| D | 500-999 | 12% |
| E | 1,000-2,499 | 13.3 |
| F | 2,500-4,999 | 14.1 |
| G | 5,000-9,999 | 14.6 |
| H | 10,000+ | 15 |
| ED (Academic only) | No Minimum initial order | 60% |
| GV (Government only) | No Minimum initial order | 15% |
| SB (Special Bid) | Invitation Only | Negotiable |
Are there additional discounts available higher than RSVP levels?
Yes. If you are making a very large purchase or the purchase is deemed strategic by IBM (e.g. displacing a competitor) you can be invited to get Special Bid (SB) pricing. This opens the door for even larger discounts. It requires your IBM business partner to make a case on your behalf and requires senior IBM executive approval. It is well worth the effort as the discounts can be very significant.
What IBM products are covered by RSVP level discounts?
The RSVP levels apply to all Eligible Products (EP) covered by a license agreement. In this case it is all products covered by Passport Advantage Agreement.
The list of Eligible Products covered by an IBM agreement change over time. With products being added or excluded. There may also be specific exclusions.
An example of a specific exclusion that impacted RSVP levels was the announcement made by IBM:
Price Change(s):PPA Entitlement Discount Change for IBM Passport Advantage – Effective July 1, 2020
How do I increase my IBM license discount RSVP level?
The easiest way is to simple increase the total size of transactions until you hit the next level. The more you spend the bigger the discount.
A cheaper way is to consolidate the PA transactions into one PA site. This increases the transaction value and may move you up a level. It is worth doing the quick calculation to see if you will move from one band to another by migrating.
A 0.5% or 1% saving on a million dollar spend is a significant saving.
Can I lose my IBM license RSVP level discount?
Yes. If your transaction amount goes your points go down. This may lead to you dropping an RSVP level and hence the discounts that will be applied. You can only drop one band per year. If you are cancelling IBM S&S it is worth noting this when calculating your ROI from cancellation.
Are the IBM RSVP discount levels good value?
You need consider the impact of any new purchase of IBM licenses, including IBM S&S on your RSVP bands levels. You might save more by buying less of a product or cancelling support than would by staying in a band level. You need to model it before deciding.
Conclusion
If your organisation wishes to maximise their return on investment in IBM licencing it is important to understand how close you are to going over or under a particular Relationship Suggested Volume Price (RSVP) pricing level. That 1-2% difference can be very significant when you are spending millions.
You can change bands, for the better by merging PA sites or potentially buying a little more than you require now to get an overall saving.
Before making any commitments model out what the impact will be, taking into account RSVP discount levels.
Resources
- IBM Passport Advantage Top 8 FAQs
- IBM Passport Advantage Agreement
- IBM Passport Advantage Express Agreement
- Announcement by IBM on July 2020 removing discounts on certain products
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