This blog is the second in our series breaking down a comprehensive guide on IBM license compliance audits into easy-to-digest posts. In this installment, we explore sub-capacity licensing—a crucial yet often misunderstood aspect of IBM compliance.

Mastering sub-capacity licensing can mean the difference between optimized costs and unexpected full-capacity claims. We’ll walk you through the essentials, from ensuring ILMT is correctly deployed to validating reports and staying audit ready.

Stay tuned as we continue to unpack IBM’s compliance challenges, helping you navigate audits with confidence and control.

IBM License Compliance: Ensuring Sub-Capacity Licensing Compliance

When it comes to IBM software audits, failing to meet sub-capacity licensing requirements can be a costly mistake. Sub-capacity licensing allows organizations to pay only for the actual computing power allocated to IBM software rather than the full capacity of the underlying hardware. However, this isn’t automatic—IBM enforces strict compliance rules, and failure to adhere to them could result in a full-capacity charge, leading to significantly higher costs.

So, how do you ensure your organization is meeting IBM’s sub-capacity licensing requirements?

1. Confirm Sub-Capacity Eligibility

Not all IBM software qualifies for sub-capacity licensing. Products using Processor Value Unit (PVU), Virtual Processor Core (VPC), or Resource Value Unit Managed Activated Processor Core (RVU MAPC) licensing metrics must meet IBM’s conditions to avoid being charged at full capacity. Organizations should verify their eligibility by checking IBM’s licensing policies and agreements.

2. Deploy IBM-Approved Monitoring Tools

One of the most critical requirements is the deployment of an IBM-approved sub-capacity monitoring tool. The IBM License Metric Tool (ILMT) is the most commonly used solution because it’s free, but BigFix Inventory and select Flexera tools are also accepted.

Simply installing ILMT isn’t enough—you must:
✅ Keep ILMT updated (new versions are released quarterly)
✅ Deploy the BigFix agent on all machines running IBM software
✅ Ensure continuous data collection and accurate reporting
✅ Store at least two years’ worth of ILMT audit reports

Failing to meet these requirements could result in IBM defaulting your licensing to full capacity, increasing costs exponentially.

3. Maintain Accurate & Complete Reports

ILMT and other sub-capacity tools must be configured correctly and continuously monitored. Reports should be checked regularly for discrepancies, missing data, or misconfigurations, which can trigger compliance issues. Key steps include:

📌 Validating VM Manager connections to avoid ILMT defaulting to higher PVU assumptions
📌 Purging outdated machines to prevent inflated license counts
📌 Manually verifying software classification since ILMT’s automatic classification is often inaccurate

Regular internal reviews can help catch and resolve issues before an IBM audit does.

4. Be Prepared for an Audit Review

IBM auditors will scrutinize ILMT data for inconsistencies or lapses. If ILMT hasn’t been properly maintained, IBM may not accept sub-capacity licensing—even if you were eligible. Proactively addressing any gaps before an audit begins will prevent unpleasant surprises.

Up Next: Protecting Your Data with an NDA

Even if your organization meets all sub-capacity requirements, an audit can still pose risks—especially when it comes to sharing sensitive data. Before engaging with IBM auditors, organizations should consider requesting a Non-Disclosure Agreement (NDA).

An NDA ensures that proprietary business information, security details, and internal processes aren’t misused beyond the scope of the audit. In our next blog, we’ll explore why an NDA is a crucial safeguard and how to negotiate its terms effectively. Stay tuned!

In the meantime, if you are keen to see the full guide, you can enter your email to download it here:

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