On February 1, 2023 (more than five years since the previous revision), IBM announced a new revision (11) to the International Passport Advantage Agreement (IPAA) and International Passport Advantage Express Agreement (IPAEA). With the new release, there have been significant changes in the agreement that current Customers will need to understand to adhere to the licensing and reporting requirements that IBM has put forth now.
The revised IPAA should be reviewed thoroughly to understand the changes IBM has made as it is going to affect all the current and prospective IBM customers both in the short and long term. The key requirement for all IBM customers will be a focus on managing their IBM estate to ensure that they are always compliant.
On announcing a new revision (11) to the Passport Advantage Agreement (IPAA) and Passport Advantage Express Agreement (IPAEA), IBM has made sure to give current customers sufficient time to process and understand the changes it has made in the revised agreements which will be effective May 1, 2023 per the terms of IPAA. The revision took effect from February 1, 2023 for all new IPAA customer enrolments and new IPAEA transactions. Please note, transactions completed under multi-year contracts like Enterprise License Agreements (ELAs) will continue under the existing terms of such contracts until the end of the contract.
The Passport Advantage Express Agreement (11) has been updated in the same ways as the Passport Advantage Agreement (11), while still retaining its unique transactional features. The notification of terms changes was made only to Passport Advantage customers as this is a relational agreement whose terms remain in effect unless and until modified by notification per the agreement, or as otherwise agreed in writing between IBM and the Customer. Conversely, the Passport Advantage Express Agreement is a transactional agreement, with applicable terms being in place as of the date of each transaction.
Below is the summary of changes and enhancements:
Future IPAA Modification Notification
- Until this time, IBM sent email notifications to notify customers of any modifications in the IPAA. Going forward, IBM will notify the Customers of any modifications to this IPAA by posting a notice on the IBM Terms web page instead of sending email notifications. All IBM Customers must subscribe to the IBM Terms web page to ensure that they receive direct notification of any such modifications.
Subscription Licenses
- Until now, an attachment had to be signed which governed initial and subsequent purchases of IBM software Programs under the Subscription License licensing model. As part of the revised agreement, IBM has incorporated the terms into the applicable sections of the IPAA that provide a new licensing model for IBM Programs without the need to sign a separate Attachment.
- The Subscription License model provides the flexibility to use the Program and receive Software Subscription & Support (S&S) for the subscription term. Customers may not terminate entitlements before the end of the current term, but to address their business needs have been given the flexibility to determine the term length.
- For select Programs that the Customer has previously licensed and has active S&S (Qualifying Program), the Customer may upgrade to a Subscription License Upgrade Program. When a Subscription License Upgrade is acquired, the Customer may use the Qualifying Program and the Subscription License Program in any deployment combination up to the total number of entitlements purchased for the Subscription License Upgrade Program.
Container Licensing
- Previously, to take advantage of IBM’s Container Licensing policy the Customer must sign a Passport Advantage Addendum (Special Option for Container Licensing Terms). This Addendum included an obligation to use IBM License Service to monitor usage and required the Customer to generate and keep reports on a frequent basis as evidence of their usage. Now, IBM has incorporated terms into the Full Capacity and Virtualization Requirements section (Section 10) of the IPAA for container usage of Eligible Container Products without the need to sign a separate Addendum.
- Eligible Products that meet the requirements for Container usage (Refer to IBM Container Licenses) may be licensed under Container Licensing terms (Eligible Container Product). Customers must acquire entitlements for the total number of processor cores associated with the capacity of all containers available to the Eligible Container Product.
Government Option
- With the new release of IPAA (11), Government Option terms have been integrated into the applicable sections of the IPAA without the need to sign a separate Attachment.
- Customer’s Sites enrolled as a Government Site on the IPAA Enrolment Form receive applicable discounted pricing.
- To participate in Government Option, Customer must be a national, regional, or local government agency or affiliated government entity in its country and select ‘Government’ as ‘Customer type’ when enrolling in Passport Advantage. (Ref: IPAA Government Option)
Academic Volume Option
- IBM have incorporated into IPAA the terms previously in the IPAA Attachment for Academic Volume Option eliminating the need to sign a separate Attachment.
- Customer’s Sites enrolled as Academic Volume Option Site on the IPAA Enrolment Form receive applicable discounted pricing.
- For Academic Volume Option pricing, Eligible Products must be used for academic or administrative purposes only and may not be used for commercial purposes.
- To participate in Academic Volume Option, Customer must be an Accredited Education Institution, defined as a public or privately funded body, non-profit making, and not owned by a commercial organization. For details, refer IPAA – Academic Volume Option
Restructuring and Clarity
- IBM has restructured and made updates throughout the IPAA for additional quality and clarity of terms and consistency with other IBM agreements.
License Verification
- Previously, there was a requirement that “Customers agreeing to create, retain and provide to IBM and its auditors accurate written records, system tool outputs, and other system information sufficient to provide auditable verification that Customer’s use of all Eligible Products is in compliance with the Agreement including the licensing and pricing qualification terms referenced in the Agreement”, just that the reports were provided to IBM or an independent Auditor only when requested.
- But now, the requirement has changed significantly and states that – “Customer will, for all Programs at all Sites and for all environments, create, retain, and each year provide to IBM upon request with 30 days’ advance notice: i) a report of deployed Programs, in a format requested by IBM, using records, system tools output, and other system information; and ii) supporting documentation (collectively, Deployment Data).’
- There is still a question mark on the format in which IBM is going to request the reports from the Customer. IBM might share an update on this in the coming months. It might be that IBM sets the same format for all its Customers or might change it depending on the tool used by the Customer to measure IBM Compliance. Who knows?
IBM Software Subscription and Support (S&S)
- Most of terms in the S&S section of the agreement remain the same and it is the language and presentation that have been modified by IBM to make it more understandable.
- A term relating to renewing expiring S&S at a lesser quantity has been carried forward in the current agreement with slight language modifications and additional terms attached to it.
- If Customer requests to renew expiring S&S at a lesser quantity of IBM Program uses and installations than the expiring quantity, Customer must provide system generated documentation that verifies current usage and installations of the IBM Program to IBM, as specified in the Agreement.
Terms added by IBM in the latest release –
- If the documentation is not received by IBM at least 30 days prior to the S&S renewal date, Customer must renew all expiring quantities.
- If Customer’s S&S coverage lapses, the benefits of S&S will no longer be available to the Customer including the ability to access the Program’s downloads, media, and fixes. To reinstate S&S, Customer must acquire S&S at then current prices for all uses and installations.
Customer’s Reporting Responsibilities
There have been updates to the Reporting Responsibilities section in IPAA (11). The previous IPAA had reference to ILMT and its reporting requirements only, whereas the revised IPAA modifies it with the mention of applicable license reporting tool as well as adding the reporting requirements of Container Licensing with the requirement of signing a separate addendum going away. Please find the updates below.
- For Eligible Products under Sub-Capacity Licensing and Container Licensing, Customer agrees to properly install, run, and maintain the most current version of the applicable license reporting tool within 90 days of Customer’s first deployment and produce a report. Unless IBM approves a different reporting tool, the Customer agrees to the following tools.
- Sub-Capacity Products – Customer will use the IBM License Metric Tool (ILMT) and to subscribe to the ILMT support notifications at http://www.ibm.com/support/mynotifications and promptly install any updates.
- Container Products – Customer will use the IBM License Service tool and Customer is responsible for the correct configuration according to the Eligible Container Product’s documentation.
- For Eligible Products running in Full Capacity, in all Sites and environments, Customer may track (manually or using an available IBM tools) and report Customer’s licenses for each Eligible Product at least once a year and retain each report a minimum of 2 years and provide reports to IBM upon request. The report format must contain similar information as noted in the “Manual Calculation of Virtualization Capacity” report at: IBM Passport Advantage – Virtualization Capacity (Sub-capacity) Licensing
- For Eligible Products that no longer meet Sub-Capacity Licensing requirements for which Customer would like to continue to license under Sub-Capacity Licensing terms, Customer will submit a migration plan to meet the Sub-Capacity Licensing requirements for IBM’s review and approval. During this migration, Customer shall maintain the version of ILMT that supported the Eligible Product based on the Sub-Capacity Licensing requirements prior to becoming ineligible and continue to generate ILMT reports. With IBM’s prior written consent, Customer may manually manage and track such Eligible Products in accordance with above term.
The changes in the IPAA may seem simple, but in reality it most likely will take a lot of time and effort for Customers to get accustomed to these changes. Failure to meet these new requirements and you are out of compliance! IBM has never been an easy to manage publisher in terms of licensing and reporting but now the Customers will face real challenges as reporting will no longer be a one-off activity where they have to report their license usage to IBM. The first reporting period for most of the Customers might be very stressful as they must be prepared for the unexpected surprises along the way which they might not have expected as they have been managing their licenses retrospectively. Customers will have to change their approach towards the management of their IBM licenses and become more proactive and look for efficiencies to make the next reporting period a better experience.
This article was mostly focussed on the updates and enhancements made to the existing IPAA and would require a deep dive of full IPAA (11) for all the Customers to understand the licensing terms and reporting requirements in its entirety.
Please reach out to us for any questions or clarifications on IPAA (11) or any aspects related to IBM licensing. You can email us at info@tmg100.com