We are often asked about ILMT.  Is it required by IBM?  What does the tool do?  What are the advantages and disadvantages of installing and using it?  Following are some answers to these and other questions.

Is ILMT required by IBM?  No. Your company does not have to run ILMT.  While IBM licensing requirements stipulate that you must keep track of your deployment of IBM software; you can do this manually with an excel spreadsheet or use a separate fee-based tool without implementing ILMT. 

That said, there are significant advantages to running ILMT in certain IT environments. To understand its value, we need to define what the tool does and where it is needed.

What is ILMT?  ILMT is IBM’s free software tool designed to report on server-based software deployment (more technically, the processor value unit (PVU) license consumption of software products). While it can run on servers that are not virtualized, its primary value is realized in virtualized environments.

What is a virtualized environment?  This is an IT environment in which software and/or hardware allow software products to run using only a subset of a server’s physical space and/or its processing capacity. That is a description of “subcapacity” usage in a “virtualized” server.  Examples of IT environments that accommodate virtualization include Windows servers running VMWare or Microsoft Hyper-V, servers that are physically partitioned including IBM Power servers running LPARS, and virtualized servers in the Cloud.  

What is the primary value of running ILMT in a virtualized environment?  ILMT generates reports on sub-capacity usage in virtualized environments and is required for you to benefit from subcapacity pricing for your server-based product licenses.  With ILMT, you pay for only what you use, and that reduces your costs.

The disadvantage of not having ILMT, and it is a big one, is that if you have a virtualized IT environment without ILMT, IBM will assess you at full-capacity pricing for virtualized servers—pricing that reflects the cost of software licenses required for use of the entire physical server.

What are the financial ramifications of paying full-capacity pricing in a virtualized environment?  The increase in costs can be quite substantial. It is not uncommon to have a single virtual server running on a physical machine that has 10 times the number of cores that are used by the virtual server. If IBM were to charge under full-capacity pricing, they would charge for licensing needed for all 10 cores on the physical server instead of the one core used by the virtual server. You would pay 10X the price you would have paid if you had had ILMT with subcapacity pricing.  This could translate to increased costs of tens of thousands, tens of millions, or more for the use of a single software product.  These days, it’s not unusual to see physical servers with 80 cores, so you can see how not having ILMT in a virtualized environment could become a very big problem.

Why is the timing of ILMT installation an important factor in saving my company a great deal of money?  In an audit, IBM is entitled to ask you for two-years’ worth of ILMT data, which is commonly called a “two-year lookback.”  If you have not had ILMT for a full two-year period, IBM can still require full-capacity pricing.  Therefore, if you don’t have ILMT and you are running IBM software in a virtualized environment (or are planning to move to one), you should consider installing ILMT as soon as possible to help avoid paying full-capacity pricing.  There are some exceptions where you don’t need ILMT, but they are rare.

Can IBM make me install ILMT?  No.  However, in answer to the question we posed in the title of this article, ILMT is best thought of as a carrot and not a stick. You don’t have to run ILMT, as long as it makes sense for you to pay full-capacity pricing, or your deployment falls under an exception. In general, installing ILMT is the best strategy for reducing the cost of IBM software licensing by paying for only what you use, instead of paying for what can be used.

The biggest challenge with ILMT is keeping it working and accurate: Installing ILMT is only part of the effort. IBM requires all PVU products that are priced under sub-capacity to report to ILMT and to report quarterly.  That requires significant configuration as well as validation processes to make sure the reports are accurate.

Key installation and operational challenges with ILMT:

• Since this is client server, it takes some effort to get all the clients to report properly given firewalls, etc.
• You need to make sure there are Agents on each relevant server in the environment.
• Software products needs to be excluded that have been purchased as part of a bundle or under a non-PVU licensing metric; or which do not require a license (based on current specific license definitions and usage in your environment).
• Accuracy is key for analysis and making PVU calculations in complex virtualized environments.

What if you make a mistake?  One common error we see is a company forgetting to install an Agent on a virtual server hosting an IBM program. In this case, you will be asked to pay full-capacity pricing for that server.  One small mistake can lead to significant unexpected costs if you are ever in a licensing review.

Additional benefits to installing ILMT:

1. Better SAM: ILMT can help you track all of your IBM PVU-based software inventory.  ILMT is the only tool approved by IBM in their licensing terms and conditions, and it can be very effective when implemented properly. This could result in a significant improvement to your organization’s Software Asset Management (SAM).  Most publishers offer no free tools for customer use.
2. Optimizing your investment in IBM software licenses.  It is important to be clear about your software usage as well as your entitlements. Being unsure of actual usage for IBM products or software from any other publisher can result in your company needing more licenses than you are using or paying for more licenses than you actually need.
3. Options for cost reductions: ILMT shows all products and features on the server.  You can use this data to lower costs at your next renewal based on changes that often occur, e.g., modifications to bundling, features added to or eliminated from products, opportunities to reduce the level of licenses for users, or options to change metrics.

To learn more, please Contact us.