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IBM Software

© 2007 IBM Corporation

IBM Software Group

Passport Advantage Sub-capacity Announcement OverviewNovember 06, 2007

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IBM Passport Advantage Software – Sub-capacity Licensing

Agenda

Chronology of sub-capacity offering

Review of key software licensing concepts

Sub-capacity licensing concepts

November 6 sub-capacity announcements

Useful links

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Chronology of Passport Advantage Sub-capacity Licensing

Date Announcement

April 19, 2005 Formal sub-capacity offering announced

April 25, 2006 Sub-capacity offering enhanced with x86 support

April, 2007 Suspension of 3 sub-capacity terms

November 6, 2007 Elimination of 2 sub-capacity terms that were previously suspended

Enhanced support for x86 to the processor core

Intent to support new STG virtualization technologies

Mid-2008 New license metric tool and simplified sub-capacity offering

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IBM Software Licensing Strategy is Simple

Value

Price

Users

Price

Processor Capacity available

Price

Price scales to value

Price Competitively

Balance precision with simplicity

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Transition to PVUs

Transition from per processor to Processor Value Units (PVUs) Announced PVU structure and part numbers in July, 2006 Renewal quotes after November 1, 2006 were processed in PVUs *

Customers renewed every 1 per processor SW maintenance entitlement with 100 PVUs Majority of Per Processor license and SW maintenance parts were withdrawn in January, 2007

Previously acquired (existing) per processor license entitlements Existing per processor license entitlements can be used on an “as if converted” to PVU basis

1 per processor license entitlement equals 100 PVUs

Licensing congruency for deployments on new technologies (in new or existing contracts) Deployments on dual and quad-core x86 processor cores require either:

0.5 existing per processor licenses, or 50 PVUs per processor core

New software acquisitions or migrations to Power6 processor cores require either: 1.2 existing per processor licenses, or 120 PVUs per processor core

* Long term contracts generally continue in per processor until renewed/amended

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Measuring Processor Capacity Available

Identify the number of processor cores available to the IBM software product

– Multi-core chips (referred to as “processors”, “processor chips” or “processor sockets”) have more than one processor core per chip

– Servers can have one or more single-core chips or multi-core chips available to IBM software

Identify the processor type and associated required number of PVUs per processor core

Number of processor cores available multiplied by the PVUs per core for each software product

For assistance in determining PVUs for a given server model, see Guide to Identifying Your Processor

Processor Value Units (PVUs) are a measurement of Processor Capacity

Website for current table: http://www-306.ibm.com/software/lotus/passportadvantage/pvu_licensing_for_customers.html

(Table current as of September 30, 2007)

Table: Processor Value Units (PVUs) per CoreProcessor Type

Brand Numberof cores

IBM POWER6 2 ■ 120IBM POWER5 2 ■Fujitsu SPARC64 VI 2 ■HP PA-RISC 2 ■Intel® Itanium® 2 ■Sun UltraSPARC IV 2 ■IBM System z 1 ■2

Any Any single core 1 ■IBM PowerPC 970 2 ■IBM POWER5 QCM 4 ■AMD Opteron 2,4 ■ ■Intel® Xeon® 2,4 ■ ■Sun UltraSPARC T2 4,6,8 ■ ■ ■Sun UltraSPARC T1 4,6,8 ■ ■ ■ 30

Notes: 1IBM SW defines "Processor" as a Core2One IFL or engine

This table provides PVU requirements for currently available processor technologies only. Requirements for future processor technologies will be provided as they become available.

Hex

a-C

ore

Oct

i-Cor

e

50

Processor1 Families

Sin

gle-

Cor

e

Dua

l-Cor

e

Qua

d-C

ore

100

PVUsper

Processor Core

Vendor

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PVUs Provide Flexibility Through Granularity

Continue licensing at the processor core level Adaptable to any change in processor core performance Granularity to address changing technology

Flexibility to deliver software price performance improvements for new processor technologies

Time

Software price performance improvements will range over time depending upon a number of factors including market conditions

Processor core performance levels will vary between chip vendors PVUs relative to core performance

Processor Core Performance

Price Performance

# of Processor Value Units

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Processor Capacity – Full Capacity vs. Sub-capacity

Full capacity licensing Customers acquire Processor Value Unit (PVU) licenses based on

processor capacity available on server (all activated processor cores multiplied by PVUs per core)

PVU tiers based on performance of processor cores

Sub-capacity licensing for virtualized systems

Customers acquire PVUs for virtual processor capacity available Technology enables customers to restrict processor capacity available to

middleware Virtual processor capacity enables over-assignment of processor resources Effectively increases processor capacity utilized and reduces customer TCO

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Server with No Partitions

8 Physical Cores in the Server

WAS

MQ

1

WAS MQ

8 8 Total Cores

Cores to be licensed

(Workload #1)

(Workload #1)

Scenario #1 - Full capacity licensing required

2 3 4 5 6 7 8

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Server with Simple Virtualization – Static Partitions

Partition 2Partition 1

2 4 2 3


WAS

MQ

41 3 1 4 Processor Cores Available to each Partition

WAS MQ

4 4 Partition 1

4 . Partition 2

8 4 Total Cores


WAS(Workload #1)

(Workload #1)

(Workload #2)

Same server, more workload, fewer software licensesStatic partitioning can increase processor capacity utilizationTCO improves as workload increases and cores to be licensed decreases

Scenario #2 - Sub-capacity software licensing optional

1 2 3 4 5 6 7 8

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Server with Fully Virtualized Environment

Partition 4

Partition 1

Shared Processor Pool

1 2 3 5 6 1 2

1 2 3 4 1 2 3 1 2

MQ

4

Partition 2 Partition 3

Other

WAS MQ 4 4 Partition 1

4 Partition 2

+ 2 . Partition 3

10 4 Sub-total

6 6Capacity of Shared Pool

. . Partition 4

6 4 Total Cores


6 Processor Cores Available to Shared Pool


License rule: the lower of the sum of each partition for a product or the processor capacity of the shared pool

10 Virtual Processor Cores

WASWASWAS

Same server, more workload, fewer software licensesVirtualized partitioning can further increase processor capacity utilizationTCO improves as cores to be licensed decreases

(Workload #1) (Workload #2) (Workload #3)

(Workload #1)

(New Workload)

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Scenario #3 - Sub-capacity software licensing optional

1 2 3 4 5 6 7 8

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Software Licensing Financial Summary

Scenario 3:

Server with Virtualized Environment

Number of Cores to license

PVUs per Core

SRP* per PVU

Total SRP (Cores x PVUs x SRP)

Full cap licensing Sub-cap licensing

8 4 12

100 100

$155 $66$124,000 $26,400 $150,400

8 8 16

100 100

$155 $66$124,000 $52,800 $176,800

Scenario 1:

Server with No Partitions


PVUs per Core

SRP* per PVU


Scenario 2:

Server with two static Partitions


PVUs per Core

SRP* per PVU


6 4 10

100 100

$155 $66$93,000 $26,400 $119,400

8 8 16

100 100

$155 $66$124,000 $52,800 $176,800

N/A N/A N/A

8 8 16

100 100

$155 $66$124,000 $52,800 $176,800

WAS MQ Total WAS MQ Total

* Suggested retail price for New License and first 12 months maint. for WebSphere Application Server Network Deployment and WebSphere MQ products

Customer’s TCO improves with IBM Sub-capacity licensing

(USD prices current as of September 30, 2007)

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Benefits of IBM’s Processor Capacity Licensing

Licensing to the core More granular measure of processor capacity available

PVU licensing Flexible structure allows licensing to more closely track to the value a

customer can receive from processor capacity available to software

Sub-capacity licensing Allows customers to license less than the full capacity of the server Customers can leverage virtualization technologies to optimize their system

design and improve their overall TCO Aligns customer value with price; lesser discounts may be appropriate

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Sub-capacity Announcement – Nov. 6, 2007 Eliminate LMS registration and Quarterly Reporting to IBM

Simplified license metric tool due mid-2008 Tracks all PVU-based offerings Will be required for sub-capacity offering (suspension will be lifted when available)

Statements of Direction for support by end of 4Q08*: Multiple Virtual Shared Pools feature for AIX V5.3 and V6.1 Dedicated and Shared Processor LPAR Groups Live Partition Mobility for AIX V5.3 and V6.1 Workload Partitions Manager (WPAR) for AIX V6.1 Live Application Mobility for AIX V6.1

Additional granularity for supported technologies x86 multi-core Sun UltraSPARC T1 (Niagara 1)

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Sub-Capacity Licensing Requirements

Install IBM license metric tool (mid-2008) Identifies IBM software deployed on servers Identifies processor type and number of processor cores Calculates PVUs required based on maximum processor capacity

Use tool and maintain reports to be audit ready

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Install IBM license metric tool (mid-2008)

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Generate & Submit Report (Quarterly)

Customers must agree to the terms of the sub-capacity attachment

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Register AdminServer

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Customer Notification of Changes

Announcement letter AP: AP07-0273 Canada: A07-2348 EMEA: ZA07-0206 US: 207-273

This announcement modifies existing PA Sub-cap Attachment Updated Sub-cap attachment planned to coincide with release of

new license metric tool

Letter to all existing sub-capacity customers

Public web site updated

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Sub-capacity Licensing Requirements Summary

Supported products/technologies lists found on XL Sub-capacity web site

Please note: Customers are responsible for the installation of the upcoming IBM license metric tool and for the server it runs on. While required use of the current IBM license management tool is temporarily suspended, customers remain responsible for acquiring sufficient quantities of license authorizations to comply with the sub-capacity offering terms.

Customers must agree to the terms of the sub-capacity attachment Customers must use eligible IBM programs with sub-capacity part numbers Customers must use eligible virtualization technology Customers must use eligible processor technology Install IBM license metric tool when it becomes available (mid 2008)

– Identify processor type and number of processor cores

– Identify IBM software deployed on servers

– Calculate PVUs required based on high water mark processor capacity available

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Full capacity to Sub-capacity License Conversions

Sub-capacity products have unique part numbers Need to license sub-capacity part numbers Same PVU list price for both sub-capacity and full capacity See list of eligible products

Customers may convert their full capacity entitlements to sub-capacity

Existing per processor or PVU licenses converted to PVU (only) sub-capacity licenses

Existing SW maintenance entitlements converted to PVU sub-capacity entitlements

Must be in compliance and SW maintenance must be current prior to conversion No refunds, credits, or substitutions

Conversion process and forms available Contact your local support representative

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Useful Links Sub-capacity licensing (external)

http://www-142.ibm.com/software/sw-lotus/services/cwepassport.nsf/wdocs/subcaplicensing Included on this page:

Sub-capacity Eligible product list

Sub-capacity Eligible Virtualization Technologies

Sub-capacity attachment

Sub-capacity customer letter for temporary suspension

Sub-capacity licensing (IBM Internal only) http://w3-103.ibm.com/software/xl/portal/viewcontent?type=doc&srcID=XT&docID=Z693913I54286V29

XL PA portal (IBM Internal only) http://w3-103.ibm.com/software/xl/portal/viewcontent?

type=doc&srcID=XT&docID=P216209A21004Q75#overview Included on this page:

PVU Table:

PVU Resources for Customers:

Guide to Identifying Your Processor Family (IBM Internal only) P6 FAQ’s & other PVU announcement info (IBM Internal only):

http://www-142.ibm.com/software/sw-lotus/services/cwepassport.nsf/wdocs/subcaplicensing

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Counting SW Licenses Using Specific Virtualization Technologies

New scenario-based license counting material will be available to assist you in determining the correct number of cores requiring licenses in the following virtualized sub-capacity environments:

Currently supported System p, System i and zLinux

HP

Sun coming soon

VMware coming soon

Look for the link on the XL Sub-capacity web page

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Questions?

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Backup

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What is Virtualization? Logical representation of resources not constrained by physical limitations Virtualization is the process of presenting computing resources in ways that

users and applications can easily get value out of them, rather than presenting them in a way dictated by their implementation, geographic location, or physical packaging. In other words, it provides a logical rather than physical view of data, computing power, storage capacity, and other resources. -- Jonathan Eunice, Illuminata Inc.

A technique for hiding the physical characteristics of computing resources from the way in which other systems, applications, or end users interact with those resources (Wikipedia)

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What can be virtualized?

Virtualization can be used with: Servers Storage Networks

IBM Software’s PVU licensing only affected by server virtualization

Types of server virtualization Hardware support: IBM POWER, Sun SPARC, HP Integrity Software support: VMware, Xen, Microsoft, et al. Operating System support: IBM AIX 6.1, Sun Solaris 10, etc.

ApplicationsDesktops

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Benefits of Server Virtualization

Higher resource utilization

Lower management costs

Usage flexibility

Improved security

Higher availability

Increased scalability

Interoperability and investment protection

Improved provisioning

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Impact of Improved Server Utilization

Server utilization refers to the percentage of the CPU cycles required to perform work

Average utilization varies significantly between platform types In general,

System z has the highest average utilization RISC systems have moderate utilization PC Servers (x86) have lowest utilization

Server virtualization can improve average utilization and lower TCO

USED

Unu

sed

USED

Unu

sed

USED

Unu

sed

USED

Unu

sed

Consolidated & Virtualized Overall utilization improved

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Impact of Virtualization on SW Licensing

SW costs can vary in a virtualized environment depending on the vendor’s terms Some vendors charge per virtual machine

IBM’s strategy is to only require licenses for the maximum processor core capacity available to the virtualized system Leverages the strength of IBM’s PVU licensing Leverages the processor core as the surrogate for customer value Provides the flexibility to increase partition capacity as business needs

require Provide a tool to track PVU usage Lower total cost of software ownership (fewer licenses required)

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