Sep 28, 2018
Tomás O'Leary
Tomás O'Leary
Tomás O'Leary

IBM’s business model may be steadily shifting towards hosted applications but traditional on-site licensing still accounts for a significant proportion of their annual revenue. Even more important to IBM income however are the add-ons that accompany each license. Annual maintenance contracts, or “annuities” as IBM calls them are the true gold – which is why your IBM account manager pushes so hard for your signature come renewal time.

Unfortunately for IBM shareholders, customers (especially the larger ones) only typically review their maintenance agreements when they approach expiry - every one, three or five years. 

IBM software audits as a revenue creation tool

With a business model based on shifting volumes of stock, how can IBM sell more maintenance contracts? By selling more licenses to existing customers obviously. But what if you have no plans for an upgrade? 

That’s where an IBM audit comes into play. By sending auditors on site, IBM has a golden opportunity to check for a license count shortage and then sell you new ones to make up for the shortfall. More importantly still, each of these new licenses must then be added to a maintenance contract, tying you to IBM support for another possible three to five years.

Most likely, this new support contract will not run alongside your existing agreement. Instead it is likely to exist independently. Which helps to increase the amount of cash rolling into Big Blue. 

A major headache for legacy software owners

If an IBM audit identifies a legitimate shortfall in licenses, it is absolutely right that your business makes up the difference. But what happens when the shortfall is related to a legacy system that no longer plays a role in line-of-business operations? Especially one that is due to be retired? 

It is possible that you hold unused licenses somewhere in the organisation. If your business has completed a merger or acquisition for instance, the subsidiary company may have records that are yet to be merged with your own. You access the Passport Advantage account for each site to double-check – the IBM audit team will possibly overlook this factor when carrying out their own license count.

If there is still a shortfall, you will have to bite the bullet and buy the licenses – even if the system is being retired within the next six months. But you should not be sucked into the IBM maintenance trap. IBM will not offer you a temporary support agreement, the shortest term you can obtain will be twelve months. Which means that your business will be paying for six months support it doesn’t need and will never use. 

Making the most of an IBM software audit

When it comes to legacy IBM applications, it makes little sense to pay a premium for OEM support – particularly when the system is due to be retired imminently. Far more effective for your business will be a flexible support agreement with an IBM third party support provider like Origina. 

We can offer a short-term maintenance contract that is not only cheaper, but which ends when you stop using the system in question. This immediately gives you greater control over your infrastructure. 

An agreement with Origina also offers some protections in the event of a failed IBM audit. If you are found to have insufficient licenses in place, Origina will not charge any extra to add them to your existing maintenance contract. Obviously you will still have to pay IBM for new licenses, but there will be no corresponding increase in maintenance costs. 

To learn more about easing headaches related to IBM software audits, and how Origina can help you regain control of costs and contracts, please get in touch with us.

Recent Posts

Gartner’s Market Guide for Independent Third-Party Maintenance for IBM, Oracle and SAP Software
On September 10th, Gartner published their first Market Guide for Independent Third-Party Software Maintenance (TPSM) for IBM, Oracle and SAP Software.
Understanding the changing role of the SAM
Within the IT department, software asset management is easily overlooked. Which means that SAMs rarely get the recognition, support or resources, they deserve (and need).
IBM/HCL - Breaking News
From the 1st of January 2020, IBM will no longer own or continuing to support Appscan, BigFix, Unica, Commerce, Portal, Lotus Notes & Domino and Connections as they have sold 7 of their legacy software systems to Indian based company, HCL.


Neue Rollen, neue Aufgaben – das Profil des SAM ändert sich.
Innerhalb der IT-Abteilung wird der Bereich Software Asset Management gern mal links liegengelassen. Das heißt, der SAM erhält nicht immer die Anerkennung, Unterstützung oder Ressourcen, die er verdient (und dringend benötigt).
IBM/HCL - Aktueller Stand
Mit dem 1. Juli 2019 hat IBM den Support für Appscan, BigFix, Unica, Commerce, Portal, Lotus Notes & Domino sowie Connections eingestellt, da das Unternehmen diese Softwarelösungen an die indische Hindustan Computers Limited (HCL) verkauft hat.
IBM/HCL - Was passiert jetzt?
Am Dienstag, den 28. Mai, veranstalteten der Origina CEO, Tomás O’Leary, und Martin Thompson vom ITAM Review ein Webinar, das den Verkauf großer Teile des bestehenden IBM-Softwareportfolios an HCL zum Thema hatte.


Comprendre l’évolution du rôle des SAM
Dans les services informatiques des entreprises, la gestion des actifs logiciels (Software Asset Management) passe facilement au second plan. Les responsables SAM bénéficient donc rarement de la reconnaissance, du soutien ou des ressources qu’ils méritent - et dont ils ont besoin.
IBM/HCL - Dernières actualités
Depuis le 1er juillet 2019, IBM ne possède plus les logiciels Appscan, BigFix, Unica, Commerce, Portal, Lotus Notes & Domino et Connections et n’en assure plus le support, puisque la société a cédé 7 de ses anciens logiciels à son homologue indien, Hindustan Computers Limited (HCL).
IBM/HCL - Que se passe-t-il maintenant ?
Le mardi 28 mai, Tomas O’Leary, PDG d’Origina et Martin Thompson du magazine The ITAM Review ont participé à un webinaire portant sur le rachat d’une grande partie des anciens logiciels d’IBM par HCL.