Software Asset Management Considerations- IBM FlexPoints

IBM has given its customers plenty of flexibility when it comes to measuring and paying for license consumption. But with all the options available, it can get confusing as to which one is right for your organization’s needs. In this article, we want to share a few thoughts and considerations when it comes to licensing when using IBM FlexPoints.

Let’s get started!  

When deciding on a software license purchasing model, you need to understand a variety of factors. Some of the key deciding elements are:

• Time – How long will I need this software?
• Upfront vs. Lifetime Cost – Perpetual vs. Subscription
• Product Growth / Expand-ability

When you take into consideration Monthly Subscription & FlexPoints, you must consider a couple of new factors. Those factors are:

• Product Flexibility
• Metric Flexibility

For example: If you are considering deploying IBM DB2 Advanced Enterprise Server Edition (DB2 AESE) today, there are dozens of ways to purchase that product:

1. Perpetual vs. Monthly Subscription 
2. Processor Value Units (PVU) vs. Virtual Processor Core (VPC) vs. Authorized User Single Install (AUSI) vs. Terabyte (TB)
3. Unrestricted or restricted to Non-Production Environments

For each of those points there are break-even considerations:

1. After 3 years, Perpetual becomes more cost-effective
2. Above 71 PVUs per core, the VPC becomes more cost-effective
3. For each TB it is equivalent to roughly 145 PVUs
4. If under 40 DB2 AESE users for every 100 PVUs per install it is more cost-effective by Authorized User Single Install (Under Flexpoints that may increase to 264 Users per VPC)

Adding even more complexity, IBM has now introduced options to add Flexibility to those licenses– FlexPoint Bundles – https://flexpoint.mybluemix.net/.

With the Hybrid Data Management FlexPoint, you can now change Products and Metrics within the following FlexPoint Bundles:

So, now that we’ve discussed the factors to consider, and the changes IBM has introduced with their FlexPoint model, let’s talk through how you might decide which model is right for your organization. 

At first, you may do some quick comparisons and see that a VPC of DB2 AESE under the new FlexPoint offering is more expensive than purchasing under the traditional model. If you are dealing with a stable, long-term environment, then purchasing under the traditional model quickly becomes the right choice. If you don’t live in such a simple world, then you need to start considering other options. 

Let’s say you know that initially, you will only need a small environment with a few users. So, it makes sense to start licensing by user. Eventually, however, once the environment has grown, it becomes more cost-efficient to change to VPC. If you’re on perpetual licensing, you now find yourself needing to repurchase the license. 

Now, this issue could be solved by selecting monthly licensing (subscription) because it allows you to switch at the end of the month. But what if you know that you’ll most likely use the environment for more than 3 years? 

This is where the Perpetual FlexPoint option becomes very beneficial. Even more powerful is that if down the road you decide to stop using DB2 AESE, and you want to switch down to DB2 Warehouse or change over to DB2 Big SQL, then you have the option to do so without losing the value for the licenses already paid.

With all these options that IBM allows for its customers, at some point, you may begin to ask yourself the following: Is this complexity of dealing with various metrics, product ratios, perpetual vs monthly subscriptions worth it? For those companies that don’t have an unlimited budget, the typical answer is yes, but please do not forget to remember the increased cost of managing and monitoring your software portfolios.

If you need help with your IBM Licensing, feel free to reach out to us and we will connect you with one of our IBM licensing experts. 

*https://www.ibm.com/support/knowledgecenter/SS8JFY_9.2.0/com.ibm.lmt.doc/Inventory/overview/c_flexpoint.html