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IBM tightens Passport Advantage licensing terms

Small changes to fine print could lead to another fine mess

IBM software customers should be on their guard following changes to the fine print of the giant’s Passport Advantage program.

IBM reworded part of Passport Advantage late last year, The Reg has learned, putting more onus on the customer than ever before to keep clear and accurate records of their software use.

The changes mean that should you receive an IBM audit and cannot produce such records, you could be liable for a full two-years’ maintenance back payment — on top of paying for the software license.

Under the terms of the old Passport Advantage, a customer found to be out of compliance following an audit would be liable for software subscription and support “for the lesser of the duration of such excess use or two years".

Now, however, Passport Advantage states:

“If client's records are inadequate to determine IBM Subscription and Support or Selected Support charges, IBM's charges for any excess usage will include two years of associated maintenance and IBM Subscription and Support or Selected Support.”

The message is clear: if you can’t prove during an audit exactly when an overuse took place you pay a full two years' maintenance – that’s 40 per cent of license cost.

Buttressing this, the newly worded Passport Advantage states you will provide upon written request: “Records and system tools outputs and access to ... premises, as reasonably necessary for IBM and its independent auditor.”

The old Passport Advantage was gentler. It stated IBM “may verify” compliance in a manner that “minimizes disruption to the customer’s business and IBM may use an independent auditor provided IBM had a “written confidentially agreement” in place with such an auditor.

All this means customers must now exist in a permanent state of readiness for an IBM audit.

The updated Passport Advantage was phased in during the last four months of 2014 for new and existing customers.

They were highlighted earlier this year by Eric Chiu, leader of the IT asset consulting practice of software audit and license specialist HW Fischer and Company.

Chiu told The Reg: “It appears that the changes are created by IBM to address the ‘delaying tactics’ being employed sometimes by IBM’s customers to stall an audit request, via excuses on resource constrains or NDA negotiation."

“By removing wording relating to both areas IBM now has a much stronger legal grounds to insist a prompt initiation of audit,” he added.

Chiu is not surprised by the changes, saying there’s been an increased level of activity by IBM’s audit team in the UK.

But, he noted, IBM is not doing anything significantly different to other big software publishers, such as Microsoft, Oracle and SAP.

“IBM customers will be left with fewer chances to negotiate their way out of a non-compliance situation, often caused by the lack of management of IBM’s complex software license models,” Chiu said.

An IBM spokesperson told The Reg the revision was "to align the Passport Advantage Agreement with IBM's work to simplify its customer contracting across the board". ®

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