202005.13
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IBM Eliminates Sub-Capacity Licensing for Windows 2008 Servers

Microsoft recently ended support for all servers running Windows 2008, Windows 2008 R2, and Windows 7 operating systems.  After support ended, IBM announced that after Q3 2020, it would no longer support its IBM License Metric Tool (“ILMT”) on any computer running those operating systems.  IBM also announced that computers running those operating systems would…

201909.19
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An Audit by Another Name: IBM’s new IASP Program

This year, IBM announced that it was going to present certain customers with the opportunity to participate in its new IBM Authorized SAM Partner Services (“IASP”).  In a recent webinar that it co-0presented with KPMG, one of its approved IASP partners, IBM described the opportunity as an “alternative to an IBM audit.”  For IBM customers…

201908.29
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Be Wary of Certain ISV and Embedded Software Agreements

It is common for software solution providers to use third-party products to support the functionalities those providers have developed for their solutions. For example, a network-monitoring solution may incorporate IBM Cognos functionality, or an accounting solution may incorporate a Microsoft SQL Server database. Increasingly, in today’s market, those solutions are hosted over the Internet, and…

201905.01
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Can a Software Publisher Force You to Audit Your Customers?

Many software-solution vendors utilize third-party infrastructure or application programs as frameworks for embedded solutions that they sell to their customers and install on their customers’ computers. Licenses for those third-party products typically can be acquired by a vendor and passed to its customers pursuant to the terms of an Independent Software Vendor (ISV) or Original…

201901.04
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New ILMT Policy Could Increase Financial Exposure in IBM Audits

IBM may be making it more difficult for IBM customers to qualify for sub-capacity licensing in virtualized environments.  As many companies who have been audited by IBM have learned, it is sometimes difficult to demonstrate that the company has met all the criteria necessary to avoid licensing the full capacity of the virtualized environment. With…

201709.08
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IBM Introduces Sub-Capacity Licensing Benefits for z/VM Version 6

On July 17, 2017, IBM announced that it would allow customers running z/VM Version 6, Release 3 or higher to license the product on a sub-capacity basis.  Under the sub-capacity licensing arrangement, IBM customers can purchase licenses for a fraction of the full machine capacity, which can often reduce costs and increase flexibility.  However, companies…

201704.11
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Are Artificial-Intelligence Software Audits Around the Corner?

Recent weeks have seen a number of news reports and announcements indicating that the Next Big Thing for audits – financial audits, at least, for the time being – is the use of artificial intelligence technologies to facilitate the analysis of large volumes of data in the context of audit-related activities. KPMG’s recent announcement was particularly noteworthy from my…

201703.15
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Customers Using Software Recently Acquired by IBM Should Proceed with Caution

In 2015, IBM acquired no fewer than 11 software and services companies.  Many software customers are surprised that after IBM purchases a company, IBM often significantly changes the license terms of the products.  For some customers that have purchased unlimited or site licensing with the prior software publishers, IBM’s changes can be surprising and expensive….

201702.20
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IBM’s Audit Rights Take a Turn for the Worse

The software-audit language contained in IBM’s standard license agreements never has been anything that anyone would mistake for customer-focused or even very fair contract terms. However, in August 2014, IBM released a new version of its Passport Advantage Agreement (PAA) that applied immediately to all new business that now is in the process of being…