IBM Passport Advantage Agreement Update

IBM Passport Advantage Agreement Update

IBM has revised their Passport Advantage Agreement, starting with new IBM software customer in November 2017 and with existing customers on 1 February 2018.

The Passport Advantage Agreement has not been updated since August 2014, but there are new changes:

It seems longer due to additional country terms, and a change of font size, but in essence it’s the same length.   Here are the details:

• 1.9 Eligible Products:
  There are more details regarding eligible products, but the essence is the same. It relates to a situation where IBM discontinues support of a software product, that does not allow you to deploy and use a quantity in excess of what you own.  I’ve rarely had this come up in an audit situation, since most organizations understand they shouldn’t deploy more than they own.  However, let’s assume an organization loves Lotus 1-2-3, and deploys it enterprise-wide.  If it does not own licenses, it’s a theft of IBM’s Intellectual Property, even if the organization has sunset support on the product.
• 1.10 Renewal:
  A paragraph was added about prorating for Fixed Term, Token, or regular Software Subscription and Support. Although not contained in the IPAA before, IBM was able to prorate charges previously.
• 1.12 Compliance Verification
  This is important with regards to audits. The 2014 IPAA only had one paragraph in this section.  The 2017 revision has some additional information, but the idea is still the same.
  • Client will purchase adequate software licenses before deploying IBM software.
  • Client is responsible for knowing where they deploy IBM software and maintaining accurate records.
  • Client will provide this information to IBM, or their auditor, upon request.
  • If Client has excessive usage of IBM software, they will be responsible for buying adequate licenses.
  • If Client has inadequate records of software usage, two years of software support may also be charged.

What has been added to the IPAA?

1. Further clarification regarding IBM’s possible use of an independent auditor

2. Compliance Verification is applicable to all sites and environments

These two items are not new with regards to IBM Software License Reviews.  IBM generally uses an independent auditor for data collection and assessment, and the IPAA terms apply to all sites and environments where the client is using IBM software.

• 1.13 Programs in a Virtualization Environment (Sub-Capacity Licensing Terms)
  IBM added a paragraph to be more specific regarding non-compliance with Sub-Capacity licensing.  This further explanation does not change the terms though.  All IBM software customers are Full Capacity by default.  If a customer adheres to the Sub-Capacity licensing terms, they can license only the actual or virtual processor cores allocated to the software program, aka Sub-Capacity.
  UPDATE:
  MAJOR CHANGE IN THIS SECTION, applicable to those with less than 1,000 employees: The language is very similar to the 2014 version and can be easily overlooked. IBM did not point it out in their change documents, either on the IPAA home page – https://www-01.ibm.com/software/passportadvantage/sss_wyntka_revised_pa_agreements.html, or in the IBM FAQ regarding the revised IPAA, located at http://public.dhe.ibm.com/software/passportadvantage/PAO_Customer/Passport_Advantage_2018_FAQ_Client.pdf

  In the 2014 version, there was a list of conditions that an IBM software customer only had to meet one in order to use manual reporting in lieu of installing ILMT.  The 2018 version combines two of the conditions so BOTH must be met:

  If you are not a Service Provider that provides IT services to end user customers and you do not have a Service Provider managing your environment – ii) if Client’s Enterprise has fewer than 1,000 employees and contractors (2014 condition ii), AND the total physical capacity of Client’s Enterprise servers measured on a full capacity basis is less than 1,000 PVUs (2014 condition iii).

  Miro feels IBM’s notification letter discussing the policy changes was also insignificant at communicating this change to IBM’s smaller enterprise clients:

  In addition, new terms have been added that provide for a suspension of Sub-Capacity eligibility in certain situations.

• 1.14 Client’s Reporting Responsibilities
  There was a slight change in this section.  Prior to this version, customers could subscribe to notifications.  The IPAA has been updated to ‘Client will subscribe’. There is also an addition of ‘Client will not alter, modify, omit, delete, or misrepresent by any means, directly or indirectly’ any audit reports (part of 1.12 Compliance Verification).

  In general, the overall agreement hasn’t changed.  The addition or changes to language to the three sections that regard compliance, 1.12, 1.13, and 1.14, just have some clarification, rather than any ‘rule changes’ with regard to licensing and IBM Software Audits.