Three Ways a Lack of Software Contract Transparency Costs Your Business

IBM software contracts and licenses are notoriously complex – and deliberately so. The reason is simple – the more complicated a license, the harder it becomes for customers to define exactly what they are (and are not) allowed to do with the application.

Arguably, IBM licensing complexity helps to keep customers locked into the perpetual software upgrade cycle. But for the customers themselves, IBM software contracts in their current form are bad for business.

1. Unclear usage terms

When IBM end support for a particular product version, are you still able to use it? Or if you upgrade, are licenses for the old software version invalidated? Can you continue to use software without an IBM maintenance contract in place?

All of these are valid questions – and none of them are easily answered. You could ask your IBM account manager, but don’t expect a straight answer. Assuming they know the answers (there’s a very real chance they don’t), you will be actively dissuaded from continuing to use  – doing so will reduce IBM’s earning potential from your business.

If you can’t get the answers you need, the only “safe” option is to buy more licenses, or to upgrade your platform – both of which may involve unnecessary operational disruption and cost.

2. Unclear costs

As digital transformation efforts get underway, your operations team will begin to test the limits of what they can do with your applications. Push too far in the wrong direction however, and you could incur unexpected additional costs for using software and APIs outside the terms of your license.

Sounds crazy? Don’t forget that IBM often reserves the right to change your contracts unilaterally – and without spending too much energy on bringing those changes to your attention. Worse still, IBM assumes that by renewing your maintenance contract you also accept those changes. These place two additional burdens on the SAM. First, they must fully understand the terms and conditions of their IBM licensing. Second, they will need to be included in early discussions about future projects to prevent API or license misuse. Use example Josh forwarded on about how IBM changed the bundles software depending on the SW version. When they upgrade to a new version, they potentially/unknowingly need extra SW.

Without the ability to understand potential costs, it is impossible to budget for them. The operations director could foreseeably exceed their budget – and the SAM may end up taking the blame.

3. Wasted time and resources

The ambiguity of IBM licensing terminology is a resource drain. Every hour spent trying to understand what you think the contract means is an hour that could be better spent on strategic projects.
The same is true of IBM software contract renewals. The process takes months to complete because of the constant to-and-fro between parties seeking the best possible outcomes. Again, the time and resources sunk into renewals because the contract is fiendishly complicated could be better spent on improving your own products and services.

Cutting through the noise

As stated previously, IBM have no interest in making their licensing easier to understand, particularly while maintenance renewals represent an important revenue stream for their shareholders. But in order to meet the strategic goals of your business, you must be able to properly understand what you can, and cannot do, with the licenses you own.

By far the easiest way to get the answer you need is via an independent advisor. As an IBM third-party support provider we have in-depth knowledge of the licenses for many IBM products. The fact is, our knowledge is on par if not better than that of your account manager at IBM.

We can help you understand your entitlements, and how they are best applied to your future projects. And by helping to extend the lifespan of your software assets, we can also reduce disruption to operations, and your running costs.