IBM license audits often come as an unwelcome surprise for IT service management (ITSM) professionals like yourself. Despite maintaining a positive relationship with your IBM account manager and investing significantly in software and support (S&S) over the years, your organization might still receive notice of an IBM license audit. Why does this happen?
The Top 10 IBM License Audit Triggers
Several triggers could put your organization on IBM’s license audit radar. Below, I outline ten of the most common IBM license audit triggers to help your organization assess its risk and prepare accordingly.
#1 Significant Business Growth
If your business is experiencing notable growth, IBM might expect you to increase your investment in their software solutions. This growth could involve scaling up existing products or adopting new ones. A lack of corresponding purchases to match business expansion may raise flags, leading to an IBM license audit.
#2 Organizational Restructuring
Mergers, acquisitions, and divestitures introduce significant compliance risks. License agreements may need reassessment, and entitlement gaps often emerge during transitions. IBM knows that restructuring budgets usually include IT considerations, which makes this a prime time for a review or an IBM license audit.
#3 IT Infrastructure Changes
Large-scale changes to your IT infrastructure, such as hardware upgrades or expanding virtual environments, can increase IBM licensing risks. Products with Processor Value Unit (PVU) metrics are particularly vulnerable, as changes in nodes or virtual machines may inadvertently require additional IBM licenses.
#4 Reduced or Stable IBM Investments
IBM anticipates annual revenue growth of 3-5% from its customers. If your organization’s investment in IBM products has remained static or decreased – particularly in S&S renewals – it could trigger an IBM license audit as it looks to uncover potential non-compliance.
#5 Project Cancellations Involving IBM Products
When a major project involving IBM software is canceled, it may attract attention. Organizations often tolerate licensing gaps with the expectation that the project will address them. If the project’s cancellation halts planned purchases, IBM may initiate a licensing audit to mitigate lost revenue.
#6 Improper or Missing ILMT Deployment
IBM’s License Metric Tool (ILMT) is essential for compliance. Failure to deploy, maintain, or update ILMT as required puts your organization at risk of being audited. IBM requires quarterly ILMT audit reports and regular updates to qualify for sub-capacity licensing; failure to comply can lead to significant penalties.
#7 Unexpected Support Requests
When your team opens a support ticket for an IBM product that doesn’t appear in their purchase records, it justifiably raises red flags. While this might not trigger a full-scale IBM license audit, it could result in unplanned expenses or further scrutiny.
#8 Account Manager Changes
A new IBM account manager may initiate a review of all accounts to identify growth opportunities. Relationships built with the previous account manager may no longer shield you, and the pressure on the new manager to generate results could increase your IBM license audit risk.
#9 Non-Renewal of an IBM Enterprise License Agreement (ELA)
Deciding not to renew your ELA often results in an IBM license audit within 12 months. Organizations frequently over-deploy products under an ELA, and trial or limited-use licenses in the agreement may become compliance risks if not addressed. IBM expects compliance gaps to be resolved through renewal. So, if you choose not to renew, an IBM license audit is almost inevitable.
#10 High-Risk IBM Products
Certain IBM products are known to carry a higher risk of compliance issues. For example, due to their complex licensing requirements, PVU-based licenses (e.g., WebSphere, DB2) and user-based licenses (e.g., Cognos, Maximo) are common IBM license audit targets. Products with intricate models, such as Tivoli solutions, also attract scrutiny.
Bonus #11: Time Since Last Review
While not a formal trigger, organizations that haven’t been audited in over three years are more likely to be targeted. IBM assumes compliance gaps grow over time, and this assumption is often correct.
Conclusion
All the triggers listed above boil down to one key motivation: an opportunity for IBM to generate more revenue. IBM license audits are a straightforward yet effective tool for identifying non-compliance and driving additional sales.
Understanding these triggers can help ITSM and IT asset management (ITAM) professionals proactively mitigate risks and prepare for potential IBM license audits. By maintaining proper compliance practices – such as using ILMT effectively and staying ahead of licensing changes – your organization can reduce its audit risk and respond more effectively if an audit notice does arrive.
If you need help, please reach out to LicenseHawk.