IBM License Metric Tool v7.1 Customer Briefing

1. IBM License Metric Tool v7.1Customer Briefing

2. Agenda • Why Virtualization Capacity (Sub-capacity) Licensing is Important to You • What is IBM License Metric Tool • Software License Management Responsibilities • IBM Passport Advantage Virtualization Capacity (Sub-capacity) Requirements • IBM License Metric Tool Topology & Reports • IBM License Metric Tool & Tivoli License Compliance Manager Additional Information • IBM Passport Advantage Virtualization Capacity (Sub-capacity) Licensing • IBM’s Comprehensive IBM & ISV Software Asset Management Solutions

3. Why Virtualization Capacity (Sub-capacity) Licensingis Important to You • Virtualization capacity (Sub-capacity) software licensing enables customers to license (and pay) for less than the full capacity of a server or group of servers • Supports diversified workload consolidation onto virtualized servers • Distributed system sub-capacity licensing compliments Processor Value Unit (PVU) licensing • PVUs provide a fair price for value received, and are based on the performance capacity of one processor core • Sub-capacity licensing lets customers license to a subset of the server capacity, down to one core, by leveraging eligible virtualization technologies Note:Recognizing the use of the word “Virtualization” becoming commonplace in the industry, IBM is changing the name of it’s offering from “Sub-capacity” to “Virtualization Capacity”. You should expect these names to be used interchangeably for a period of time, after which “Sub-capacity will be phased out in favor of “Virtualization Capacity”.

4. What is IBM License Metric Tool? • IBM License Metric Tool v7.1 (ILMT) helps Passport Advantage clients determine their full and virtualization capacity (sub-capacity) Processor Value Units (PVU) licensing requirements.  • ILMT is a no-charge offering for Passport Advantage customers • Part #: D561HLL ILMT Sub-capacity PVU License with S&S for 12 Months • Part #: E027NLL ILMT Sub-capacity PVU S&S Annual Renewal • ILMT helps calculate the maximum processor core capacity in PVUs, including supported virtualized servers, that are available to installed Passport Advantage PVU-based software. • Passport Advantage PVU-based virtualization capacity (sub-capacity) offerings license terms require IBM License Metric Tool reports to be created, verified, adjusted, signed, and saved. • IBM License Metric Toolhttp://www-306.ibm.com/software/tivoli/products/license-metric-tool/ PCs Servers

5. Software License Management Responsibilities • IBM Customer • Responsible for ensuring compliance with a software product’s license terms • Requires internal processes and controls to track compliance for all vendor software products across the enterprise • IBM • Defines license scope, metrics and terms • IBM Passport Advantage software does not have ‘hard stop’ scope and use restrictions imbedded in products. • Customer operations requires flexibility to deploy software to meet acceptable service levels at any time. • Provides IBM License Metric Tool at no-charge to assist customers with tracking deployed PVU-based licenses • Offers Tivoli License Compliance Manager & Tivoli License Compliance Manager for z/OS to help customers optimize all their vendor licensed software. (IBM and ISV) • A complete Software Asset Management solution that helps customers proactively determine software over-licensing (savings opportunity) and under-licensing (potential compliance risk)

6. No-Charge IBM License Metric Tool Benefits • Achieve and maintain complianceUse the reports to help determine if you have the appropriate number of Processor Value Unit (PVU) license entitlements for each Passport Advantage PVU-based product installed in your IT environment. • Support Distributed Server VirtualizationHelps manage diversified workload consolidations onto virtualized servers with partition specific PVU-based software inventory reports. • Lower liability risksReduce the risks of not meeting your Passport Advantage PVU-based contractual licensing conditions as well as the unplanned cost of license compliance payments. • Track IBM PVU-based software inventoryHelps maintain a continuously updated inventory of where IBM Passport Advantage PVU-based software assets are installed on your networks.

7. IBM License Metric Tool Capabilities • DiscoverIBM License Metric Tool scans your network to determine what PVU-based IBM distributed software (including Linux on System z) is installed on discovered servers and the quantities and types of activated processor cores available to them. • AnalyzeIBM License Metric Tool calculates the server's maximum processor core capacity including supported virtualized servers that is available to installed IBM software and determines the required number of PVU entitlements. • ReportAudit reports and delta comparisons presenting product offering and PVU data can be generated for viewing and printing. Each signed audit report creates a certified record history for audit purposes. • IBM License Metric Tool information • Helps provide reported number of PVUs in your environment to compare with your license entitlement records. • Key activity to help ensure compliance with IBM Passport Advantage PVU-based licensing terms.

8. IBM Virtualization Capacity (Sub-capacity) Licensing ILMT Requirements • Passport Advantage PVU-based virtualization capacity (sub-capacity) software customers must implement IBM License Metric Tool v7.1 (ILMT) within 90 days from physical General Availability. • Physical GA: August 1, 2008, 90 days later: October 31, 2008 • Part #: D561HLL (ILMT Sub-capacity PVU License with S&S for 12 Months) • Passport Advantage PVU-based virtualization capacity (sub-capacity) software customers are responsible for maintaining ILMT audit reports for two years, with a maximum fiscal quarter interval between signed reports, and making these reports available during an audit. • Exceptions • Small Environments • Tivoli License Compliance Manager Customers * A complete description is available at the IBM Passport Advantage Sub-Capacity Licensing Website: http://www-306.ibm.com/software/lotus/passportadvantage/subcaplicensing.html

9. IBM Virtualization Capacity (Sub-capacity) LicensingILMT Requirements: Exceptions • Small Environments… • ILMT does not support the customer's eligible virtualization technology. Once support for an eligible virtualization technology becomes available (via Fix Pack, new version, release, or modification), you will be required to install IBM License Metric Tool within 90 days of that availability date. In order to be notified when IBM License Metric Tool support for eligible virtualization technologies become available, you will need to subscribe to "My Notifications" via http://www.ibm.com/support/mynotifications (after July 21, 2008). • ILMT will not be required for customers with less than 1,000 employees and contractors worldwide. This exception does not apply to Service Providers* and customers who have contracted with a Service Provider* to manage their sub-cap server environment. * Service Providers are any entity that provides IT Services for end user customers, either directly or through a reseller • ILMT will not be required for customers with less than 1,000 PVUs total worldwide physical server capacity where PVU sub-capacity products are deployed.For these exception customers, use of ILMT, is recommended, but not required for Sub-Capacity Licensing. In lieu of ILMT, customers are required to manually manage, track, and prepare Audit Reports documenting their virtualization capacity by product for their eligible environments during each calendar or fiscal quarter and maintaining this documentation for at least two years to demonstrate ongoing compliance. * A complete description is available at the IBM Passport Advantage Sub-Capacity Licensing Website: http://www-306.ibm.com/software/lotus/passportadvantage/subcaplicensing.html

10. IBM Virtualization Capacity (Sub-capacity) Licensing ILMT Requirements: Exceptions • Tivoli License Compliance Manager Customers • IBM Tivoli License Compliance Manager customers (IBM’s Software Asset Management offering to help optimize IBM & ISV software licenses) will have 180 days from physical General Availability of IBM Tivoli License Compliance Manager V2.3 (D561CLL only) with the fix pack that brings ITLCM V2.3 up to date with current Passport Advantage Sub-Capacity Licensing requirements for eligible virtualization technologies to migrate. This fix pack is expected to be released by the end of 2008. • Customers are responsible for maintaining Tivoli License Compliance Manager reports for two years, with a maximum fiscal quarter interval between signed reports, and making those reports available during an audit.(All statements regarding future IBM direction and intent are subject to change or withdrawal without notice and represent goals and objectives only. All statements regarding IBM's plans, directions, and intent are subject to change or withdrawal without notice.) • Customers who deployed IBM Tivoli License Compliance Manager for IBM Software V2.X (IBM’s previous no-charge offering for sub-capacity reporting) have 180 days from physical General Availability to migrate to IBM License Metric Tool v7.1. • Physical General Availability: August 1, 2008, 180 days later: January 31, 2009 • Customers are responsible for maintaining License Metric Tool reports for two years, with a maximum fiscal quarter interval between signed reports, and making those reports available during an audit.

11. IBM License Metric Tool Topology Admin Server • Historical repository • Administration • Inventory • Auditing • Reporting • WebSphere Application (eWAS) Web Browser Interface • Integrated Solutions Console • Administration • Reporting DB2 Data Repository • Agents • Data collection • HTTP/HTTPS communication with Admin Server ILMT includes a limited-use license for: • DB2 Universal Database (9.1)

12. IBM License Metric Tool Main Menu

13. IBM License Metric Tool Reports

14. IBM License Metric Tool Reports

15. IBM License Metric Tool Flexibility • The License Metric Tool will report PVU-based software products where its agents are deployed. • The user has the ability to mark any product that should not to be taken into account in computing the total PVU license allocation for a product. • IT environment • Backup, Disaster recovery if not actively doing work (warm/cold) • Product instance not compatible with the system (used in case of shared disks) • Software license entitlement • Evaluation, Trial etc. under terms of the ILAEP or similar IBM terms • Early Support Program (ESP), Beta/Alpha, or similar IBM program • Component of bundle, restricted-use License as part of a larger bundled offering • Not licensed based on PVUs (i.e. user-based, development/non-production use, etc.) • Other (additional free-text comment is required when selecting that option)

16. IBM Also Offers a Complete Software License Management Solution • IBM License Metric Tool provides simple inventory tracking for PVU-based products • For customers who want to optimize all their Software licenses, IBM offers Tivoli License Compliance Manager (TLCM) • For both IBM and ISV software • TLCM Helps customers proactively determinesoftware over-licensing (savings opportunity) and under-licensing (potential compliance risk): • Builds a comprehensive software inventory • Measures software product use activity (invocations) • Measures associated license use activity including complex license types • Automatically links license entitlements • Enables IT to optimize licenses across organizational units • For more information on Tivoli License Compliance Manager: http://www-306.ibm.com/software/tivoli/products/license-mgr/

17. IBM License Metric Tool (ILMT)Tivoli License Compliance Manager (TLCM)

18. No-Charge IBM License Metric Tool Benefits • Achieve and maintain complianceUse the reports to help determine if you have the appropriate number of Processor Value Unit (PVU) license entitlements for each Passport Advantage PVU-based product installed in your IT environment. • Supports Distributed Server VirtualizationHelps manage diversified workload consolidations onto virtualized servers with partition specific PVU-based software inventory reports. • Lower liability risksReduce the risks of not meeting your Passport Advantage PVU-based contractual licensing conditions as well as the unplanned cost of license compliance payments. • Track IBM PVU-based software inventoryHelps maintain a continuously updated inventory of where IBM Passport Advantage PVU-based software assets are installed on your networks.

19. IBM License Metric Toolhttp://www-306.ibm.com/software/tivoli/products/license-metric-tool/ • IBM Passport Advantage Sub-Capacity Licensing Website:http://www-306.ibm.com/software/lotus/passportadvantage/subcaplicensing.html • Tivoli License Compliance Manager (distributed systems)http://www-306.ibm.com/software/tivoli/products/license-mgr/

20. IBM License Metric Tool v7.1Customer Briefing Backup • Technical Requirements • Sub-capacity Licensing Requirements: Detail

21. IBM License Metric Tool Topology Admin Server • Historical repository • Administration • Inventory • Auditing • Reporting • WebSphere Application (eWAS) Web Browser Interface • Integrated Solutions Console • Administration • Reporting DB2 Data Repository • Agents • Data collection • HTTP/HTTPS communication with Admin Server ILMT includes a limited-use license for: • DB2 Universal Database (9.1)

22. Hardware Requirements • Machine for server: • Windows and Linux on System x servers: Intel Pentium IV 1.5GHz • AIX and Linux on System p: Model 7044/270, two processor IBMRS/6000 375 • Solaris: Sunblade 2000 model 2 Ultrasparc III processors • HP-UX: rp2470, 2 PA RISC 2.0 650 MHz processors • Linux on System z: 1 dedicated processor • Machine for agent: no special requirements

23. Hardware Requirements • Memory • License Metric Tool server only: 1 GB RAM • License Metric Tool server and its database: 3 GB RAM • Disk space for server: • License Metric Tool server only: ~1.4 GB • License Metric Tool database: dependant on the amount of data (i.e. 2 GB for 8000 agents, 30 productsper agent, 1 month of aggregation data) • Disk space for agent: ~135 MB

24. Software Prerequisites • Embedded Websphere Application Server (bundled with ILMT) • DB2 Universal Database (min. 8.1.7.912, 9.1 bundled with ILMT) • DB2 FP 9 (if running DB2 8.2 on Solaris 10) For a detailed list of supported operating systems refer to ILMT 7.1 Planning, Installation, and Configuration Guide

25. Agent – supported platforms

26. Agent - supported partitioning technologies

27. IBM Passport Advantage Software Virtualization Capacity (Sub-capacity) Licensing

28. Notice This presentation contains relative processor core performance estimates and includes technology upgrade examples which are based on relative processor core performance estimates. While these estimates are calculated by IBM using a blended average of industry standard performance benchmarks, actual performance may vary based on each customer’s unique server configuration and workload, among other factors. Any errors in the presentation are unintentional and will be corrected immediately upon being brought to IBM's attention. Should any such errors occur, this does not relieve customers from their responsibility to obtain licenses for, and to be in compliance with, the required level of authorized use for each product.

29. Name change to “Virtualization Capacity” • Recognizing the use of the word “Virtualization” becoming commonplace in the industry, IBM is changing the name of it’s offering from “Sub-capacity” to “Virtualization Capacity” • You should expect these names to be used interchangeably for a period of time, after which “Sub-capacity will be phased out in favor of “Virtualization Capacity”

30. Why Virtualization Capacity (Sub-capacity) Licensing is Important to You • Without virtualization capacity (cub-capacity) licensing, customers must license to the full capacity of the server or group of servers • Virtualization capacity (sub-capacity) licensing compliments Processor Value Unit (PVU) licensing • PVUs provide a fair price for value received, and are based on the performance capacity of one processor core • Virtualization capacity (sub-capacity) licensing lets customers license to a subset of the server capacity, down to one core, by leveraging eligible virtualization technologies • As x86 (Intel/AMD) multi-core chips add more cores per chip, customers can use Sub-capacity licensing to reduce the number of cores licensed • As RISC based servers continue to become more powerful, customers can leverage virtualization technologies to optimize their system design and improve their overall Total Cost of Ownership

31. Agenda • Processor Value Units (PVUs) licensing overview • Virtualization capacity (sub-capacity) licensing for virtualized environments overview • Virtualization (sub-capacity) licensing requirements and eligible technologies

32. 1 2 1 Terminology • Multi-core chips have more than one processor core on the socket Dual-core Single-core IBMrequires PVU licenses per Core Oraclerequires fractional licenses per Core Microsoftrequires one license per socket IBM continues to license based on the number of cores

33. Licensing is based on Processor Capacity Available Price Licensing Principles • Price scales to value • Balance precision with simplicity • Price Competitively Processor capacity available (Number of cores X PVUs per core) • Why not charge based on processor usage or utilization? • A transition to processor usage or utilization would require prices to be reset based on average system utilization • Average system utilization is estimated @ 5-20%, but every customer is different • Customers with higher than average utilization would pay more, and visa versa IBM continues to license based on the number of cores

34. One Processor Core Increasing Capacity Core Performance Core Disparity Decreasing Capacity Time Why IBM changed from ‘per processor’ to PVUs • Changes in underlying hardware technology caused “per processor” to no longer be a “fair” licensing metric • Multi-core chips: • IBM POWER dual-core (2001) • x86 dual-core (2005) / x86 quad-core (2006) • Sun Niagara octi-core (2005) • Diverging performance characteristics of processor cores (Core disparity) • IBM POWER very fast • x86 and Sun Niagara relatively slower • Unique software licensing requirements needed for differing technologies • Virtualization technologies gaining wider adoption • Sub-capacity licensing compliments PVU licensing granularity • More complex software licensing structures result

35. Processor Value Units (PVUs) • Each middleware program has a unique price per PVU • PVUs are transferable among systems, by product, within the enterprise • Acquire the appropriate number of PVUs for each processor core * See PVU website for complete list of PVUs by processor technology • Provides flexibility and granularity • Fair price per core for software value on multi-core technology • Continue to deliver software price performance improvements on new processors • License transferability across distributed systems • Enables virtualization capacity licensing at processor core PVUs provide flexibility through granularity

36. Customer Technology Upgrade Examples*: IBM POWER6 • Assuming Equivalent Software Workload: Decreasing # of PVU Licenses for equivalent workload: • Significant SW Price Performance improvements as customers migrate to new technology *Based on Externally Published Industry Benchmarks

37. POWER 5 POWER 6 (2H04) (2H07) PVU PVU Change Licenses Licenses System p PVU / Core System p PVU / Core % Required Required 32 cores 24 cores 3,200 2,880 -10% 100 120 16 sockets 12 sockets POWER 5+ POWER 6 (2H05) (2H07) PVU PVU Change Licenses Licenses System p PVU / Core System p PVU / Core % Required Required 28 cores 24 cores 2,800 2,880 +3% 100 120 14 sockets 12 sockets Customer Technology Upgrade Examples*: IBM POWER6 • Assuming Workload Grows by 50%: Significant SW Price Performance improvements as customers migrate to new technology *Based on Externally Published Industry Benchmarks

38. Benefits Of The Processor Value Unit Structure • Provides flexibility and granularity • Fair price for software value on multi-core technology • Continue to deliver software price performance improvements • Easy transition from per processor licensing • Maintain license transferability across distributed systems • Enables virtualization capacity (sub-capacity) licensing at processor core • Licensing which can adapt to virtualization • Necessary granularity for technology trends

39. Virtualization Capacity (Sub-Capacity)Licensing Overview • Full capacity licensing • Customers acquire licenses for all the physical processor cores • Virtualization Capacity (Sub-capacity) licensing • Customers acquire licenses for the lower of Virtualization Capacity or Full Capacity of the server, or group of servers • Virtualization Capacity License Counting Rules differ by Virtualization Technology, see specific rules for your Virtualization Technology Environment: Virtualization Capacity License Counting Rules Example Licensing Scenarios Follow

40. Full Capacity: Physical Cores on Server 1 Server 8 Physical Cores Server 1 MQ Software Products WAS Physical Cores 8 • Customers must acquire licenses for all of the processor cores in the server available to the software products:

41. Virtualization Capacity Example (x86 or RISC) 1 Server 8 Virtual Cores 8 Physical Cores Server 1 PAR (or VM) = Partition • Eligible Virtualization Technologies can be used to create ‘Partitions’ or ‘Virtual Machines’ (VMs) which restrict processor capacity (ie. virtualization capacity) available to a sub-set of the server or group of servers PAR 1 PAR 2 MQ MQ Software Products WAS Virtual Cores 4 4 Physical Cores 8 • License for the lower of Virtualization Capacity (using LPARs, Partitions, Virtual Machines) or Full Capacity available in the Server.

42. Virtualization Capacity Example: PowerVM Shared Pool(this example is applicable for IBM PowerVM Virtualization Technology only) 1 Server 16 Virtual Cores 8 Physical Cores Server 1 PAR 1 PAR 3 PAR 2 PAR 4 Shared Processor Pool • License rule: the lower of the sum of each partition or the virtualization capacity of the shared pool • License rule: the lower of the sum of each shared pool or the virtualization capacity of the Server MQ MQ MQ MQ Software Products WAS Virtual Cores in Partitions 4 4 4 Virtual Cores in Shared Pool 4 6 Physical Cores 8 • License for the lower of the Virtualization Capacity based on number of virtual cores, the Virtualization Capacity of the Shared Pool, or the Full Capacity of the Server

43. Virtualization Capacity Example: VMware Server Cluster(this example is applicable for VMware Virtualization Technology only) 3 Servers 12 Virtual Cores 12 Physical Cores Physical Environment Virtual Environment Virtual Machines VM 3 VM 4 VM 5 VM 6 VM 2 VM 1 Server 1 Non- IBM Non- IBM 4cores MQ MQ MQ MQ Software Product Server 2 Virtual Cores 2 2 2 2 2 2 4cores 12 Server 3 4 cores 12 Physical Cores • License for the Virtualization Capacity (vCPU quantity in VMs) or Full Capacity available in a group of servers (Cluster)

44. Summary of Virtualization Capacity Licensing Requirements • Customers must: • Agree to the terms of the Sub-capacity Attachment, and follow Virtualization Capacity License Counting Rules for the Eligible Virtualization Environment(s) • Use Eligible Sub-capacity Products, with sub-capacity part numbers • Use Eligible Virtualization Technologies • Use Eligible Processor Technologies • Use the IBM License Metric Tool (ILMT) and maintain report documentation • Certain ILMT use exceptions may apply • Detail information for each of the above requirements can be obtained at this link:Passport Advantage Sub-capacity Licensing

45. Eligible Virtualization Technologies • A high level summary list of Eligible Virtualization Technologies: • IBM Power Systems, System p, System i PowerVM (with AIX and iOS) • LPAR, DLPAR, Shared Processor Pools, Micro-Partitioning • IBM System z (with Linux): LPAR, zVM • Sun Micro and Fujitsu servers (with Solaris) • Dynamic System Domains, Containers/Zones inside Dynamic System Domains and node OS • HP Integrity and 9000 Servers (with HPUX): nPar& vPar • x86 (Intel / AMD) based servers, using the following virtualization technology: • VMware Single server, Server Cluster, and VMotion • A detail listing of Eligible Virtualization Technologies is published at this link (see table at bottom of this webpage):Passport Advantage Sub-capacity Licensing

46. Why Virtualization Capacity (Sub-capacity) Licensing is Important to You • Virtualization capacity (sub-capacity) licensing compliments Processor Value Unit (PVU) licensing • PVUs provide a fair price for value received • Virtualization capacity (sub-capacity) licensing lets customers license to as little as one core • As the number of cores per chip increases on x86, customers can reduce the number of cores licensed • Customers can use virtualization to optimize their larger systems and improve their overall total cost of ownership

47. Summary of links in this presentation: IBM PVU Website • Virtualization Capacity License Counting Rules • Passport Advantage Sub-capacity Licensing

48. Passport Advantage Sub-capacity Licensing Chronology * A complete description is available at the IBM Passport Advantage Sub-Capacity Licensing Website: http://www-306.ibm.com/software/lotus/passportadvantage/subcaplicensing.html

49. Tivoli Software Asset Management Offerings

50. Challenge: Obtaining a clear view of software license entitlements linked to what is actually deployed and used across all significant platforms. Solution: Automated software license optimization Tivoli’s unique Software Asset Management capability helps determine software over-licensing (savings opportunity) and under-licensing (potential compliance risk) by linking license entitlement information to software inventory and usage System z PCs Servers Visibility: IBM and ISV Software Assets Tivoli License Compliance Manager Products Visualize your software license entitlements linked to software deployment and usage