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© 2008 IBM Corporation
®
IBM Passport Advantage Software
IBM Internal Use Only
Virtualization Capacity (Sub-capacity) Licensing
Sales Training
July 16 and 22, 2008
IBM Passport Advantage Software
2 © 2008 IBM CorporationIBM Internal Use Only
Name change to “Virtualization Capacity”
In recognition of the use of the word “Virtualization” becoming commonplace in the industry, IBM is changing the name of it’s offering from “Sub-capacity” to “Virtualization Capacity”
You should expect these names to be used interchangeably for a period of time, after which “Sub-capacity will be phased out in favor of “Virtualization Capacity”
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Agenda
BackgroundTechnologyCompetitive landscape
IBM licensing strategyCapacity licensing principlesProcessor Value Units (PVUs) Virtualization Capacity
Licensing examplesGeneral, VMware, and IBM PowerVM
Licensing requirementsSummaryIBM License Metric Tool (ILMT)
Selling Virtualization Capacity licenses
Offering next steps
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Background - Technology
Capacity and utilization increasing = footprint compression risk
PA Software Key Facts– 54% of distributed revenue plan is PVU based– 60% of PVU based revenue is on x86 (Intel / AMD) platform
• 25% on IBM Power Systems– 70% of x86 servers are 2 socket variety
Processor Market Facts– Intel new quad-cores will have 2X capacity vs older quad-cores, GA’d in Nov ‘06– Customers require fewer cores for a constant workload– Intel moving to quad-core exclusively on 2 socket servers, to GA in 4Q08 or 1Q09
Virtualization Market Facts– Customers virtualize to consolidate servers, and save electricity, space, admin cost– x86 virtualization is growing 2X faster than RISC/Unix– VMware holds 80-85% market share for x86 server virtualization – Virtualization will drive processor utilization higher, historically at only 5-10%
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Background – Key Middleware Competitors
IBM more comprehensive and granular = opportunity to win
Capacity Licensing Microsoft Oracle IBM
Price MetricOne license per socket
Fractional licenses per core
PVU licenses per core
% middleware revenue <25% Majority Majority
Eligible Virtualization:
RISC/Unix Not eligibleYes, limited to hard
partitioning onlyYes, comprehensive
(hard and soft)
VMware on x86 One socket minimumNot eligible
(OracleVM only)One core minimum
ComplianceLicense Keys, with audit threat
Trust model, with audit threat
ILMT required, with audit threat
MS minimum license is one socket, and number of offerings on per socket limited• Also, MS runs on x86 only, and majority of middleware is priced per user (<25% per socket)
Oracle allows virtualization on hard partitioning only, and does not allow VMware
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Licensing is based on Processor Capacity Available
Processor capacity available(Number of cores X PVUs per core)
PriceLicensing PrinciplesPrice scales to valueBalance precision with simplicityPrice Competitively
Why not charge based on processor usage or utilization?A transition to processor usage or utilization would require prices to be reset
based on average system utilization Average system utilization is estimated @ 5-20%, but every customer is different Customers with higher than average utilization would pay more, and visa versa
PVUs balance precision with simplicity
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Single-core
Processor Core
Chip
Socket
Dual-core
1 1 2
Multi-core chips have more than one processor core on the socket
Terminology
Microsoft requires one license per socket
IBM requires PVU licenses per Core
Oracle requires fractional licenses per Core
IBM continues to license based on the number of cores
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Processor Value Units (PVUs)
Each middleware program has a unique price per PVU PVUs are transferable among systems, by product, within the enterprise Acquire the appropriate number of PVUs for each processor core
Processor TechnologyExample PVU entitlements
per processor core *
IBM Power6 cores 120
All Single-core and most RISC dual-core 100
x86 Dual or Quad-core 50
* See PVU website for complete list of PVUs by processor technology
Provides flexibility and granularity Fair price per core for software value on multi-core technology Continue to deliver software price performance improvements on new processors License transferability across distributed systems Enables virtualization capacity licensing at processor core
PVUs provide flexibility through granularity
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Virtualization Capacity Licensing
Virtualization capacity reduces the minimum capacity to license
2 cores200 PVUs
4 cores200 PVUs
8 cores400 PVUs
(100 PVUs p/core)History of 2 socket
X86 servers
2004/5
Single-Core
Full Capacity Licensing– Customers acquire licenses for all the physical processor cores on the server
Virtualization Capacity Licensing– Customers acquire licenses for the lower of the Virtualization Capacity or the Full
Capacity of the server, or group of servers (eg. VMware Cluster) Customers need flexibility to license to the processor capacity available
– Consolidate on large servers or server clusters to save electricity, space, admin– Minimum x86 server size growing with multi-core:
(50 PVUs p/core)
2006/7
Dual-Core
(50 PVUs p/core)
2008/9
Quad-Core
– Without virtualization capacity licensing, customers will be forced to acquire 400 PVU licenses, even if they only need 4 cores of capacity
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July 1, 2008 Announcement Highlights
Prior to July 1, 2008
Sub-capacity available for some RISC/Unix IBM, HP, and Sun technologies
Customers must agree to terms, including use of ITLCM tool
Use of ITLCM temporarily suspended in April 2007
Registration and quarterly reporting to IBM was eliminated in Nov, 2007
July 1, 2008 Announcement Highlights
Eligibility for many VMware virtualization technologies
VMware ESX (current versions) for single server and server cluster
VMware VMotion mobility functionality for ESX
Eligibility for new Power VM technology
PowerVM multiple shared pool functionality
Announced availability of ILMT, install and business rules simplified (see page 19)
Technology eligibility continues to increase, and ILMT simplified
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Virtualization Capacity Licensing General
Equivalency concept between Virtual Cores and Physical Cores
Capacity of Virtual Cores can not exceed capacity of Physical Cores
Obtain PVU licenses based on Virtual Capacity, essentially the number of virtual cores restricted to a ‘subset’ of the server
Subset = LPARs, Partitions, Virtual Machines (VMs)
Licensing rules for each unique Virtualization Technology available on website
x86 (Intel / AMD) virtualization technologies
Licensing simplicity is the top priority, given large volumes of smaller servers
For multi-core, count the number of virtual cores X 50 PVUs per core
RISC/Unix virtualization technologies
Licensing rules allow customers to optimize larger systems
Shared processor pools, dynamic partitions, micropartitions
License to the lower of: Virtual Capacity or Full Capacity
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Full Capacity Example
Server 1
MQ
Physical Cores
Software Products
1 Server 8 Physical Cores
Cores to License
MQ software
WAS software
8
WAS
Customers must acquire licenses for the Full Capacity (all physical processor cores) in the server available to the software products:
Full Capacity
8
8
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Virtualization Capacity Example (x86 or RISC)
PAR 1
MQ
Virtual Cores
Software Products
Cores to License
MQ software
WAS software
4
WAS
License for the lower of Virtualization Capacity (using LPARs, Partitions, Virtual Machines) or Full Capacity available in the Server.
PAR 1 PAR 2 Virtualization Capacity
4 4 8
4 - 4
1 Server 8 Virtual Cores 8 Physical Cores
PAR 2
MQ
4
PAR (or VM) = Partition Eligible Virtualization
Technologies can be used to create ‘Partitions’ or ‘Virtual Machines’ (VMs) which restrict processor capacity (ie. virtualization capacity) available to a sub-set of the server or group of servers
Server 1
Physical Cores 8
Full Capacity
8
8
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VMware Virtualization Technology
Definitions (excerpt from website*) vCPU or Virtual CPU
• Each Virtual Machine (VM) is assigned a vCPU quantity• The processing capacity of a vCPU cannot be more than one physical core• Each vCPU is equal to one core for PVU licensing
Licensing Rules (excerpt from website*) Single Server
• License PVUs for the maximum number of vCPUs (cores) in the VM(s) • Lower of the sum of vCPUs or the Full (physical) Capacity of Server
Server Cluster (group of servers):• License PVUs for the maximum number of vCPUs (cores) in the VM(s) • Lower of the sum of vCPUs or the Full (physical) Capacity of Cluster
Licensing simplicity for x86 based Virtualization is the top priority
* For complete licensing rules, visit the Virtualization Capacity License Counting Rules website
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Virtualization Capacity Example: VMware Server Cluster (this example is applicable for VMware Virtualization Technology only)
VM 1
MQ
Virtual Cores (vCPUs)
VM 2
Non-IBM
Server 1
Software Product
3 Servers 12 Virtual Cores 12 Physical Cores
MQ software VM1 VM2 VM3 VM4 VM5 VM6 Virtualization Capacity
Virtual Cores 1 1 2 4 - - 8
1 1
VM 3
2
VM 4
MQ
4
VM 5
MQ
2
VM 6
MQ
2
4 cores
Server 2
4 cores
Server 3
4 cores
Non-IBM
Physical Cores
Virtual Machines
12
12
License for the Virtualization Capacity (vCPU quantity in VMs) or Full Capacity available in a group of servers (Cluster)
Full Capacity
12
Virtual Environment Physical Environment
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IBM PowerVM Virtualization Technology
License Rules (excerpt*) for Partitions, Shared Pools, and Micro-partitioning
for a dedicated LPAR, the highest number of cores allocated to the LPAR
for a Capped Partition, the highest amount of Entitled Capacity (EC)
for a Uncapped Partitions, the highest amount of VP (Virtual Processor Cores)
for a Shared Processor Pool, the lower of the sum of cores for each partition, or the processor core capacity of the shared pool
Aggregate fractional processor cores, apply shared pool capping rules, and round up at the server level to the next whole processor core
lower of the sum of the virtual cores or the server capacity
Licensing rules allow optimization on larger RISC/Unix systems
* For complete licensing rules, visit the Virtualization Capacity License Counting Rules website
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Virtualization Capacity Example: PowerVM Shared Pool (this example is applicable for IBM PowerVM Virtualization Technology only)
PAR 1
MQ
Virtual Cores in Shared Pool
Software Products
Cores to License
MQ software
WAS software
4
WAS
License for the lower of the Virtualization Capacity based on number of virtual cores, the Virtualization Capacity of the Shared Pool, or the Full Capacity of the Server
PAR 1 PAR 2 PAR 3 Sum of PARs 1-3
4 4 4 12
4 - - 4
1 Server 16 Virtual Cores 8 Physical Cores
PAR 2
4
Shared Processor Pool License rule: the lower of
the sum of each partition or the virtualization capacity of the shared pool
License rule: the lower of the sum of each shared pool or the virtualization capacity of the Server
Server 1
Physical Cores 8
Virtual Cores in Partitions
PAR 3 PAR 4
MQ MQ
4
6 4
PAR 4
4
-
Full Capacity
8
8
Virtualization Capacity
10
4
Shared Pool Capacity
6
6
MQ
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Virtualization Capacity Licensing Requirements Summary
Most customers are using some virtualization already, not being aware of T&Cs. Have conversation with your customer, protect them from compliance issues
Customers must:
Agree to the terms of the Sub-capacity Attachment (see page 28)
Follow Virtualization Capacity License Counting Rules for applicable environment
Use Eligible Sub-capacity Products, with sub-capacity part numbers
Use Eligible Virtualization Technologies
Use Eligible Processor Technologies
Use the IBM License Metric Tool (ILMT) and maintain report documentation
Certain ILMT use exceptions may apply
* Detail information for above requirements, including lists of eligible products and technologies, available on the PA Virtualization Capacity Licensing website
You need to get familiar with these requirements
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IBM License Metric Tool (ILMT) The simplified new ILMT is now available for use (see page 29 image of main menu)
Existing customers have until Nov 30, 2008, to install and begin using ILMT Must promptly install new versions, releases, modifications
To order the ILMT no charge product, see page 30
Benefits Helps customers measure PVU licenses required, by software product Can help customers maintain an audit ready posture Essential for optimization of RISC/Unix virtualization technologies
Recommended for Full Capacity PVU environments
Mandatory for PVU Virtualization Capacity environments, except when: ILMT does not yet support an eligible Virtualization Technology (eg. VMware) Enterprise has fewer than 1,000 employees and contractors worldwide Full Capacity measurement of all sub-capacity servers is less than 1,000 PVUs Deployed Tivoli License Compliance Manager v2.3 (with 4Q08 Fix Pack)
For above exceptions, customers must count manually using IBM template
ILMT and/or Manual calculation records must be maintained for at least 2 years
Recommended for Full Capacity, Required for Virtualization Capacity
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Selling the value of Virtualization Capacity
New license sales Some customers may want to buy Full Capacity for licensing simplicity Sell customers the capacity they need, avoid excess license entitlements
Excess license entitlements this year, means fewer license sales next year Sell the value of Virtualization Capacity by lowering the discount vs Full Capacity
Customers can save money on electricity, space, and administrator costs Improve utilization of their hardware, fewer software licenses vs Full Capacity
License conversions from Full Capacity to Virtualization Capacity Manage conversions carefully (see considerations on page 31)
Currently, conversions are no charge (note: excludes compliance audits)
However, if full capacity licenses were acquired with high discounts, try to sell the value of conversions with lower discounts on new license sales
As of July 1, ‘08, only sales reps can authorize conversions (see rules on page 32) Note: sales rep authorization is void if compliance audit is pending or in process
Sell higher value of Virtualization Capacity by lowering discounts
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Offering Next Steps
Raise awareness / Communication Improve Training for IBM sales and BPs
IBM Software Products Make all PVU based products eligible for Virtualization Capacity Licensing
Technology ILMT support for VMware by end of 1H09 Make other important x86 virtualization technologies eligible
Microsoft Hyper-V, Citrix XenServer Add new technologies from IBM, Sun, HP
Awareness and broadening the offering are the next steps
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Virtualization Capacity Websites: Internal and External
Internal XL site Passport Advantage Virtualization Capacity (Sub-capacity) Licensing
http://w3-103.ibm.com/software/xl/portal/viewcontent?type=doc&srcID=XT&docID=Z693913I54286V29
External site Passport Advantage Virtualization Capacity (Sub-capacity) Licensing
http://www-306.ibm.com/software/lotus/passportadvantage/subcaplicensing.html
Internal/External Customers must:
(2) - Agree to the terms of the Sub-capacity Licensing Attachment
PDF - Use Eligible Sub-capacity Products, with sub-capacity part numbers
PDF - Use Eligible Virtualization Technologies
PDF - Use Eligible Processor Technologies
- Use the IBM License Metric Tool
http://www-306.ibm.com/software/lotus/passportadvantage/ibmlicensemetrictool.html
Internal/External Essentials (right hand nav bar)
1 Passport Advantage Virtualization Capacity (Sub-capacity) licensing overview presentation2 Sub-capacity Licensing Attachments3 Virtualization Capacity License Counting Rules 4 Summary of July 1, 2008 Announcement: IBM License Metric Tool and Sub-capacity Licensing5 July 1, 2008 Announcement: IBM License Metric Tool and Sub-capacity Licensing6 Processor Value Unit [PVU] licensing for Distributed SW7 Processor value unit calculator
Internal Only IBM Internal Only (right hand nav bar)8 IBM Sales Training: Virtualization Capacity (Sub-capacity) Licensing 9 Virtualization Capacity Sales Q and A
10 Conversion from Full Capacity process 11 Conversion from Full Capacity form12 Passport Advantage program Web site
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Backup
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x86 Virtualization Revenue Growing almost 2X Faster
Source: William Blair & Company, Virtualization Industry Report, January 15, 2008
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Oracle’s Approach
Oracle approaches virtualization as an advanced form of partitioning– Characterized as Hard Partitions vs Soft Partitions
– “…soft partitioning is not permitted as a means to determine or limit the number of software licenses required for any given server.”
Sources: http://www.itweek.co.uk/itweek/news/2196283/virtualisation-pricing http://www.oracle.com/corporate/pricing/partitioning.pdf
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Oracle’s Approach Hard Partitioning
– Static Hard Partitioning
– Sun Dynamic System Domains (DSD w/ DR)
– HP Integrity Virtual Machines*
– HP Secure Resource Partitions*
– Sun Solaris 10 Containers*
– AIX LPAR and DLPAR
– Micro-Partitions*
– HP vPar, nPar
Source: http://www.oracle.com/corporate/pricing/partitioning.pdf
Soft Partitioning– Solaris 9 Resource Containers
– AIX Workload Manager
– HP Process Resource Manager
– Affinity Management
– VMware
– Oracle VM* capped partitions only
Full Capacity
Sub-Capacity
* Oracle appears to allow sub-capacity pricing in soft partitioning with their Oracle
VM
*
*
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Microsoft’s Approach
Microsoft provides sub-capacity pricing across server portfolio
– Operating systems priced per physical or virtual instance
– Per Processor-based products are not capped at physical server
• Minimum size of capacity to license is one socket, not granular enough
• Each vCPU for VMware requires one socket license
Source: http://www.microsoft.com/virtualization/licensing.mspx
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Sub-capacity Attachment
Ensure customer has accepted PA sub-capacity terms Use FastPass to check: https://fastpass.lotus.com/fphome.nsf/default?openform (eg. on p34) If not, provide customer with current Sub-capacity Attachment
http://www-306.ibm.com/software/lotus/passportadvantage/subcapacityattachments.html Until revised Attachment becomes available, you may need to point customers to:
History of 2007 suspension of terms (click here) November 2007 announcement letter (US ALtr #207-173 dated 11/06/07) July 2008 announcement letter (US ALtr #208-197 dated 07/01/08)
Acceptance of sub-capacity terms for PA customers is accomplished by (re)-submission of PA Enrollment Form (for PA Express, all transactions carry sub-capacity terms) http://www-306.ibm.com/software/lotus/passportadvantage/paenrollments.html For more info: http://www-306.ibm.com/software/lotus/passportadvantage/howtoenroll.html
Revised Sub-capacity Attachment (Z125-7174-02) will be available soon English version available now via special bid approval (Sub-capacity Licensing/Somers/IBM@IBMUS) Translated versions (full set of additional languages) available for PA by end of August
Continue using current version in interim SAP update for Passport Advantage Express available as soon as possible 90 day notification of new terms to all existing PA customers who have accepted sub-cap terms
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IBM License Metric Tool Main Menu
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ILMT Ordering
While ILMT is required for many sub-cap customers, any active PA/PAE customer can order the tool to monitor both sub and/or full capacity server environments
Original ITLCM for IBM SW part numbers above have been renamed to ILMT – no need for existing customers to migrate to new part numbers – they can now download ILMT after 07/03/08 and/or order new ILMT media pack P/N after 08/01/08
Part number details also available via DSW Price Book and PA Online https://w3-117.ibm.com/software/sales/passportadvantage/dswpricebook/PbCfgInternal?E0=0 http://www-306.ibm.com/software/lotus/passportadvantage/pacustomers.html
CF/CSO will no longer force the addition of ILMT to sub-cap part number orders
P/N Part Type Description
D561HLL License IBM License Metric Tool Sub-capacity Processor Value Unit License and Software Subscription and Support 12 Months
E027NLL Renewal IBM License Metric Tool Sub-capacity Processor Value Unit Software Subscription and Support Annual Renewal
D561ILL Reinstatement IBM License Metric Tool Sub-capacity Processor Value Unit Software Subscription and Support Reinstatement 12 Months
BJ0P7ML Media Pack IBM License Metric Tool V7.1 Media pack -- Multilingual
SWG Sub-capacity Licensing Announcement
© 2003 IBM Corporation31
Seller Considerations for Sub-Cap Conversions
Conversion is not a customer entitlement…
July 1, 2008 announcement retracted previously announced conversion policy, now limited to special circumstances only
Software sellers have the delegation but should consider circumstances for which original full cap license entitlements were sold before offering conversion, for example:– Conversion could result in excess entitlements, impacting future sales
• Original deal sold as full cap with deeper discount because customer really only needed sub-cap • i.e. customer needed four cores worth of PVUs on their 8-way server but we sold them eight @ 50% discount to
avoid sub-cap terms and/or the prior tool (ITLCM)
– S&S renewal discounts should be reduced in recognition of higher value of sub-cap flexibility, especially if original discounts were inflated to avoid sub-cap
– Customers using full cap license entitlements in sub-cap environments without sub-cap terms are out of compliance• Conversion is not an amnesty tool, engage your compliance sales rep for guidance
AYCE true-ups should be based on PVUs deployed in sub-cap environment– Ideally, original contract was based on Sub-Capacity offering terms, however
– If not, do not over-entitle by giving customer full cap entitlement at true-up -- instead leverage sub-cap terms
SWG Sub-capacity Licensing Announcement
© 2003 IBM Corporation32
Passport Advantage Sub-Capacity Conversion ProcessCONVERSION – PA/PAE CUSTOMERS Conditions for Conversion
Customers who wish to convert existing full capacity license entitlements to sub-capacity terms must meet the following conditions:
1) Agree to IBM International Passport Advantage Agreement Attachment for Sub-Capacity Terms (Z125-7174), and comply with eligible products and technologies
2) Complete hardcopy enrollment forms (PA only) and IBM Sales or BP must submit to CF/CSO by fax.
3) Be current on Software Subscription & Support for full cap entitlements being converted to sub-cap
4) Customers who are not in compliance or who have been notified of or are actively involved in an IBM compliance audit are not eligible for conversion
5) No refunds, rebates, or credits for full capacity licenses that are not deployed after conversion are allowed
Process Steps for Conversion
1) IBM Sales Rep completes Sub-Capacity Conversion Form and submits to CF/CSO
2) CF/CSO will convert products to sub-capacity part numbers
3) CF/CSO will issue new license Proof of Entitlements to customer for reduction in full capacity entitlements and increase in sub-capacity entitlements
4) For customer’s initial sub-capacity order, IBM Sales or BP places order for ILMT (D561HLL)
Any exceptions to the above must be approved by SWG WW Pricing (via Sub-capacity Licensing/Somers/IBM@IBMUS)
Ordering Resources
IIPAA Attachment for Sub-Capacity Terms and Enrollment Forms: IBM reps: Xtreme Leverage; BPs: www.ibm.com/software/passportadvantage and select “Passport Advantage Program Page” from right navigation bar
Check customer’s enrollment status or ILMT status by calling your CF/CSO contact
Sub-Capacity Conversion Form:
Sub-Capacity Conversion Form
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Eligible Virtualization Technologies
A high level summary list of Eligible Virtualization Technologies: IBM Power Systems, System p, System i PowerVM (with AIX and iOS)
LPAR, DLPAR, Shared Processor Pools, Micro-Partitioning IBM System z (with Linux): LPAR, zVM Sun Micro and Fujitsu servers (with Solaris)
Dynamic System Domains, Containers/Zones inside Dynamic System Domains and node OS
HP Integrity and 9000 Servers (with HPUX): nPar & vPar & Integrity VM x86 (Intel / AMD) based servers, using the following virtualization
technology: VMware Single server, Server Cluster, and VMotion
For a detail listing of Eligible Virtualization Technologies, see website
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PA FastPass Example:
XXXXX
https://fastpass.lotus.com/fphome.nsf/default?openform