It often comes as a surprise to many organisations when they receive notice of an IBM license audit.  They might feel they have a good relationship with their account manager and have been spending a significant amount on S&S over the years.  So why are we receiving notice of an audit?

There are many reasons, or triggers, why you might have been selected for audit. Here are 10 of the most common triggers. You should review them to see if your chances of an audit are about to go up.

#1 Significant growth in business

If your business as a whole appears to be undergoing significant growth there will be an expectation in IBM that you should be investing with them.  They will expect you to buy more licenses for existing and new products. If this is not happening then an audit can be expected.

#2 Restructure of Organisation

Significant restructuring within your organisation such as a merger, acquisition or divestiture brings with it significant license compliance risks.  During an organisational change it is common for license agreements to require significant changes.   Short falls in entitlement frequently occur between entities.  Couple this with the fact that there is a budget specifically assigned to an organisation restructure. You can understand why IBM see a reason to request a review (audit) either during or soon after a restructure.

#3 IT Infrastructure Changes

Large IT infrastructure changes will attract the attention of IBM audit as it commonly introduces compliance risks for products with a PVU license metric.  As you upgrade hardware add more nodes and virtual machines to an estate you are creating a requirement for additional licenses. This is not always understood or even in scope for the project.

#4 Drop/levelling in investment in IBM technologies

The revenue from all IBM accounts is expected to grow by a minimum of 3-5% per year.  This is typically achieved by an increase in annual S&S.  Where the overall investment does not increase or actually drops due to cancellation in support your risk of an audit increases.

#5 Cancellation of a project that included IBM product

If a project that included a significant investment in IBM products is suddenly cancelled there is an increased audit risk. There are a couple of reasons this might happen.  A known gap in licensing has been tolerated with the expectation that the new project would either fix the problem or buy more licenses. The deal resulting from the project being approved may have been critical to the IBM Account Manager making his number for the quarter.

#6 ILMT not deployed or maintained

If IBM suspects you are not managing the deployment of their products they will audit you. The most common evidence you are not managing deployment is not having ILMT deployed or up to date.  IBM requires quarterly ILMT audit reports to be run. Frequent updates to the database tool in order to be eligible for sub capacity licensing are also mandatory.  The full capacity licensing fees that are required in the absence of ILMT significantly increases IBM’s incentive to initiate an audit.

#7 Request Support for an unexpected IBM product

If your technical team attempts to open a support ticket (PMR or SR) and it transpires that IBM has no record of you buying that product your account manager will be notified.  It may not result in a full audit but it could result in an unbudgeted spend.

#8 Change in IBM Account Manager

If there’s a change in Account Manager for your organisation it can precipitate a review of all accounts in an effort to generate a pipeline of business.  Relationships previously built up with the previous account manager will count for little. It’s not that it will automatically trigger an audit but the risk will go up as they are under pressure to show results quickly.

#9 End of an IBM Enterprise License Agreement (ELA)

If you decide not to renew your IBM Enterprise License Agreement you can expect an audit within 12 months.  During the term of an Enterprise License Agreement it is common for organisations to over-deploy products in their agreement.  There are also products included in an ELA that are trial or limited licenses. There is an expectation by IBM that any compliance gaps will be resolved as part of the new agreement.  If you don’t renew then there will be an audit by default.

#10 High risk IBM Products

IBM knows that certain products carry a high compliance risk, which means that IBM has a high likelihood of generating new revenue as the result of an audit. This includes most PVU licenses (e.g. WebSphere, DB2) but also user-based licenses for which user permissions are difficult to manage such as Cognos and Maximo. Products that have complicated license models, such as many Tivoli products, are also often primary targets for an audit.

#11 Over 3 years since the last review

Although not strictly a trigger I thought I’d add in a bonus #11 reason you are at risk of an audit.

If it has been more than 3 years since your last review by IBM you are at an increased risk of audit.  The expectation being that you are probably out of compliance and in our experience they are probably right.

Conclusion

The reasons I’ve suggested can all be reduced down to one, an opportunity to sell more software. A license audit is a blunt but a very persuasive tool to encourage you to spend more money with IBM.

If you know the audit triggers you might be able to avoid it. At the very least you’ll be prepared to respond when the audit letters arrives.

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