Thought-Leadership Blog


Understanding the IBM Processor Value Unit (PVU) License Metric

Thought-Leadership by Manuela Sailer
on August 13, 2015


IBM's product portfolio is quite expansive. With a wide range of products comprising 18,860 different part numbers within IBM’s Passport Advantage Program, each available at nine different price levels, many large organizations find it difficult to maintain a solid understanding of the products relevant to their unique needs.

IBM uses about 270 different types of license metrics. The Processor Value Unit metric is very popular for server-based products within the International Passport Advantage Agreement. And there is a special type of licensing available, which is used more and more frequently due to the increased use of virtualized environments, such as Processor Value Unit Sub-capacity licensing.

On the one hand, significant cost savings can be achieved but on the other hand, it is one of the most complex IBM licensing types, especially with regard to the use of IBM's License Metric Tool.

Introduction of Processor Value Licensing: A Brief History

Prior to the introduction of multicore processors in 2005/2006, IBM customers had to license their server-based products per processor. In 2006, however, IBM officially announced the introduction of a new license metric called Processor Value Unit (PVU) while discarding the per-processor licensing approach for many products.

The PVU licensing model is based on the processor cores. Thus, the costs involved with multicore processors are oriented along the computing power, as the performance of dual-core processor is much higher than that of single-core processor.

At that time, customer entitlements were converted at a ratio of 1:100, i.e. customers received 100 Processor Value Units for each entitlement (per processor). IBM published the following in this regard:

Under this licensing approach, one software license was required per processor core. So, if a system had four processor cores, a company would need four software license entitlements. However, with the widespread adoption of multicore chip technologies in today’s servers, the per-processor licensing approach no longer meets the needs of underlying processor technologies."

Basis for Calculating Processor Value Units

When using the term "processor" in a licensing context, IBM refers to a processor core in most cases. Some hardware manufacturers, however, use the term "processor" to refer to the processor chip, i.e. the processor socket.

The calculation of the PVU entitlements is based on the performance of the respective processor technology. This is reflected in the IBM PVU tables: The higher the performance of a processor, the more PVUs must be licensed per processor core. Thus, IBM updates their PVU tables periodically in line with the development of processor technologies.

This type of Change Management can be quite challenging for IBM customers. If the IT department replaces some hardware, the licensing demand usually changes as well.The following information must be available in order to determine the corresponding PVU value:

  • Manufacturer
  • Type and model number of processor
  • Quantity of processors and processor cores available to the IBM software

In certain IBM Power Processors, the PVU value also depends on the respective operating system used for operating the IBM software.

Calculating Processor Value Units

In the scenario illustrated below, how many PVUs are required, for instance, for licensing the WebSphere application server?


As a basic principle, the number of processor sockets, i.e. processors, is multiplied by the number of cores. After determining the corresponding number of PVUs per core using the PVU table, this number, in turn, is multiplied by the number of Processor Value Units.

Assume you are using IBM WebSphere Application Server (WAS) on a Linux system and procuring your software through a Passport Advantage Agreement. The WAS is running on a Dell server with two Intel quad-core processors. The processor's model number is E5620. Red Hat Linux Enterprise V6.6 is used as an operating system and KVM is used as a virtualization solution for Linux.

The WebSphere Application Server is currently running on virtual machine 1, which has been assigned 3 virtual cores.

With full-capacity licensing, you would have to license all 8 physical server cores by default. Furthermore, you can see from IBM's PVU table that 70 PVUs are required per core for an Intel Xeon processor.


Thus, your license demand:

2 processors x 4 cores x 70 PVUs = 560 PVUs.

IPAA PVU Sub-Capacity Licensing

By default, IBM customers are subject to full-capacity licensing, i.e. they need to license all activated physical processor cores, regardless of whether the IBM software actually uses all of the computing power.

If customers meet the sub-capacity licensing prerequisites of IBM Passport Advantage, they do not need to license all physical cores available. In virtualized environments, they only need to procure PVU entitlements for those processor cores that are available to the IBM software. The maximum number of processor cores to be licensed is equal to the quantity of physical cores available. This means that the number of cores to be licensed via sub-capacity will never exceed the total of full-capacity licensing.

Incidentally, IBM uses the term sub-capacity as a synonym to Virtualization Capacity. Originally, IBM wanted to establish the term Virtualization Capacity but did not manage to do so.

In a sub-capacity scenario the example above would have the following license demand:

3 cores x 70 PVUs = 210 PVUs.

Assuming you have a Passport Advantage Agreement with Pricing Level BL (entry level), than the non-negotiated price for 1 PVU of the WebSphere Application Server is approximately 60 USD.

Thus the licensing costs for the IBM WebSphere Application Server for the above stated Server in a Full-capacity Scenario would be:

560 PVU * 60 USD = 33.600 USD

In contrast the licensing costs for the IBM WebSphere Application Server in a Sub-capacity Scenario will be:

210 PVU * 60 USD = 12.600 USD

General Prerequisites Regarding IPAA PVU Sub-Capacity Licensing

In many cases, customers are not aware of the four primary prerequisites that need to be fulfilled via Passport Advantage:

  1. IBM is required to classify a product as 'sub-capacity eligible'. Initially, hardly any products were introduced as sub-capacity eligible. Since 2009, however, sub-capacity licensing has been available for nearly all PVU-based products. Only 12 part numbers are excluded, such as Tivoli Workload Scheduler for Applications..
  2. Sub-capacity requires the use of an authorized processor technology.
  3. The customer must be using an authorized virtualization technology.
  4. The customer must use the IBM License Metric Tool (continued below).

The IBM License Metric Tool for IPAA PVU Sub-Capacity Licensing

Customers do not need to use the IBM License Metric Tool (ILMT) under certain circumstances, for instance, if a customer has less than 1,000 employees. In these cases, however, it is still required to create a manual report in an Excel sheet, which does not necessarily involve less work effort.

In essence, ILMT counts the PVUs you need in order to be licensed correctly. It is not a traditional Software Asset Management tool, though, as it is limited to IBM products on the one hand and no  contracts or entitlements can be managed within this tool.

After the ILMT server and the agents have been deployed, the software findings must be processed within ILMT, i.e., every software component must be confirmed, reassigned, or excluded. Once all of the software findings have been processed, the compliance report is ready for signing.

Our experience shows that ILMT V7.5 has an average error rate of approximately 30%, with IBM's bundling issue being one of the main reasons for that. Thus, creating the compliance reports requires a significant amount of time and knowledge as the person creating the reports must be familiar with the architecture of the IBM products and their licensing models.

The License Metric Tool is also subject to strict regulations. As such, customers need to create a compliance report at least once per quarter. In contrast to the reports from the Sub-Capacity Reporting Tool (SCRT) in the mainframe environment, this report is not required to be sent actively to IBM. The ILMT reports are simply stored and need to be made available in case of an IBM compliance audit.

As an alternative to IBM's free License Metric Tool, it is also possible to use the fee-based products of Tivoli Asset Discovery for Distributed (TAD4D) or Endpoint Manager for Software Use Analysis (EMSUA). Meanwhile, IBM has discontinued TAD4D, which thus can no longer be purchased.

From a business perspective, the savings that can be achieved through the use of sub-capacity licensing should be matched carefully with the additional costs that incur through ILMT administration.


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Topics: Database and Datacenter


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