Skip to content
If you can imagine the business outcome, XTIVIA can create it with technology. Contact: 888-685-3101, ext. 2
If you can imagine the business outcome, XTIVIA can create it with technology. Contact: 888-685-3101, ext. 2
7 Myths About IBM Software Audits: What You Need to Know to Protect Your Organization

7 Myths About IBM Software Audits: What You Need to Know to Protect Your Organization

Recently, I have had increasingly numerous discussions with clients around IBM software audits. On the one hand, all IBM customers want the same thing - to be compliant, which means to use only the software they actually bought and are entitled to use vs. breaking the terms of their agreement by going beyond their agreed-upon limits. On the other hand, most of them rely on wrong assumptions about IBM software and potential audits, which puts them at a very high risk for paying more than they have to when they simply follow their agreements.

Following are seven myths that, if you believe in or act from any one of them, could result in a very unhappy, although predictable, ‘surprise’ from IBM.

Myth #1: The chances that IBM will select me for an audit are very small.

WRONG - when revenue from sales goes down, the number of audit reviews goes up. So if you have not already received an audit letter, most likely you will get it soon.


Myth #2: I have been an IBM loyal customer for years; even if there is a problem, I believe they won’t levy a strict punishment in consideration for our long-time relationship.

Sure - and we believe in tooth fairies too!

Many years ago, a smart man advised me that, if you want to understand the flow of interests, just track the money path.


What that means to you is the IBM audit team has a quota they need to reach; their main objective is to get as much revenue as they can from each customer. The achievement of that goal includes capturing all their revenues from all customers by honoring all terms of their agreements - including penalty fees.

Myth #3: I am sure we don’t use more IBM software than we bought because our software asset management team is great.

Wrong again. The IBM audit team collects millions of dollars each year from audited customers. The cases in which an audit review ended without a fine are rare. Read on to see the following myths that explain few reasons for that.


Myth #4: The IBM license system will block you from using more than you are entitled to per your agreement.

Wrong. More than 90% of IBM products have no license key restrictions, (which means if you bought a quantity of five licenses, you can technically use only five licenses). IBM trusts and believes you so, therefore, doesn’t restrict the usage. By doing so,  IBM seeds the foundation for generating millions of dollars from software audit reviews.

In other words, as much as IBM wants a positive relationship with you and your company, software audit reviews are a revenue strategy for IBM.


Myth #5: If I upgrade/change my hardware, it has nothing to do with software quantities.

Big Time Wrong! First, IBM changes the complex Processor Value Unit (pvu) matrix from time to time, and it is your responsibility to make sure you comply accordingly. If you added some processor cores during the past year without updating the software license quantities, you are taking a big risk.

For example, let’s assume you have 100 pvu for a server you bought five years ago, and you recently moved to a quad-core architecture without adapting the software quantities to the change. An audit will cost you 1300% in comparison to the maintenance fees you currently pay.

This is a bad surprise for your budget and, personally, I don’t envy the people who have to tell their organizations that they need to pay 1300% because someone didn’t know the rules. This is what causes people to lose jobs. It’s a big deal.


Myth #6: Non-production environments are free of charge.

Nope. Although there are some methods that allow non-production environments to be at no cost, in reality,  the most frequent methods have a financial cost. You don’t want to be in a position where you use a non-production environment without making sure you are entitled to do so. No need to risk penalty fees and compromising your relationship with IBM - just clarify in advance what does and does not have a financial cost.


Myth #7: I got an audit letter  - there is nothing to do now.

Not true. What you want is a trusted partner who will serve as a type of informal “lawyer “ to guide you and help you handle the situation. There are many IBM business partners that are great in implementing IBM security, IBM analytics or IBM cloud - they are expert in the products. Most likely, you purchase the software through them; however, there are only a handful of partners that understand the entire licensing mechanism so choose wisely.

It is better to reach that kind of resource before you get in trouble because they can solve a lot of problems for you. However, if you already got the audit letter or are currently under an IBM software audit review, don’t hesitate - reach out to your IBM partner today.


By knowing that the above are the seven myths can catch organizations off-guard, your organization no longer has to be one of them.

IBM offers powerful technology with clearly defined parameters. It is your responsibility to make sure your organization is in compliance with their terms. If you have any questions about your agreement, ask before you do something to save yourself potential penalties. If you find your organization is facing a potential audit, reach out to your IBM partner as soon as possible.

Compare products

{"one"=>"Select 2 or 3 items to compare", "other"=>"{{ count }} of 3 items selected"}

Select first item to compare

Select second item to compare

Select third item to compare