Engagement Snapshot
The Challenge
A leading US airline faced a daunting IBM audit with alleged non-compliance claims amounting to $25 million. The airline's IT systems supported mission-critical operations including flight scheduling, ticketing, customer relationship management, and aircraft maintenance systems — all requiring seamless uptime with zero tolerance for disruption.
IBM's audit findings highlighted discrepancies in sub-capacity licensing, entitlement mismatches, and virtualised environment misconfigurations. With operations highly dependent on continuous IT performance and a complex licensing environment spanning physical servers, virtualised systems, and cloud platforms, the airline turned to Redress Compliance to resolve the audit efficiently and protect its financial stability.
Airlines operate among the most mission-critical IT environments in any industry. Flight scheduling, real-time ticketing, CRM, and maintenance tracking systems require 24/7/365 uptime across massive virtualised server clusters. This creates complex sub-capacity licensing environments where minor configuration issues — hypervisor settings, core allocations, ILMT deployment gaps — compound rapidly across hundreds of servers, turning modest oversights into multi-million-dollar audit claims.
The Process
Audit Analysis and Review
Redress Compliance thoroughly examined IBM's audit findings, identifying overestimations and errors in licence usage metrics:
- Reviewed historical contracts and entitlement data to establish a precise compliance baseline
- Identified where IBM's calculations diverged from actual deployment configurations
- Mapped entitlements against licence agreements across multiple purchasing cycles
- Flagged specific errors in IBM's sub-capacity and PVU calculations
Data Collection and Validation
Collaborated with the airline's IT and operations teams to collect accurate usage data across the entire infrastructure:
- Gathered deployment data from physical servers, virtualised systems, and cloud platforms
- Validated sub-capacity metrics, uncovering significant discrepancies in IBM's reported usage figures
- Identified underutilised licences and misconfigurations that could be optimised to address compliance gaps
- Verified virtualisation environment configurations against IBM's licensing requirements
Strategic Negotiations
Presented IBM's audit team with a revised compliance report backed by accurate data and legal interpretations:
- Detailed evidence countering IBM's overestimated licence usage claims
- Highlighted the airline's proactive efforts to manage compliance and its significant investment in IBM technologies
- Secured major concessions from IBM, significantly reducing the scope of financial liability
- Negotiated settlement terms with no penalties or retroactive fees
Optimisation and Compliance Management
Delivered a comprehensive forward-looking compliance programme to prevent future exposure:
- Reallocated unused licences across the organisation to close compliance gaps without additional purchases
- Designed a robust compliance framework with automated tracking tools for real-time licence monitoring
- Delivered training sessions to IT and procurement teams on IBM licensing terms and governance
- Established centralised licence management with ongoing monitoring and reporting
The Outcome
| Metric | Detail |
|---|---|
| Initial IBM Audit Claim | $25,000,000 |
| Final Negotiated Settlement | $1,000,000 (96% reduction) |
| Primary Savings Driver | Corrected sub-capacity calculations, resolved entitlement mismatches, and optimised virtualised environment licensing |
| Compliance Enhancements | Centralised licence management and real-time automated monitoring tools implemented |
| Business Continuity | Uninterrupted flight scheduling, ticketing, and passenger services throughout the entire audit process |
| Settlement Terms | $1M covered additional licences for future scalability — no penalties or retroactive fees incurred |
Redress Compliance's intervention reduced the airline's financial exposure by 96%, bringing the $25 million claim down to $1 million. The settlement covered only the cost of additional licences for future scalability, with no penalties or retroactive fees. The airline maintained uninterrupted operations throughout the audit, ensuring passenger services were completely unaffected, and implemented enhanced compliance processes to safeguard against future risks.
"Redress Compliance was instrumental in turning a complex and high-stakes audit into a manageable challenge. Their expertise saved us millions and gave us confidence in our compliance processes moving forward. Their partnership was invaluable."CIO — Major US Airline
Even the largest IBM audit claims are negotiable. In mission-critical aviation environments — where sub-capacity licensing, virtualised server clusters, and complex entitlement histories create significant audit exposure — IBM's automated calculations frequently overstate requirements. Expert analysis of contracts, entitlements, and sub-capacity configurations typically reduces exposure by 80–96%, transforming a potential financial crisis into a manageable compliance purchase aligned with future scalability.
How Redress Compliance Can Help
As a fully independent advisory firm with former IBM insiders on staff, Redress Compliance provides objective IBM audit defence, licence optimisation, and negotiation support — with no commercial relationship with IBM.
Licensing Assessment
Full compliance review
Audit Defence
Expert audit protection
ELA Renewal
Enterprise agreement advisory
Negotiations
Better deals and terms
Facing an IBM Audit?
Redress Compliance provides expert IBM audit defence — staffed by former IBM insiders who know exactly how IBM audits work from the inside. We've helped enterprises reduce audit claims by 80–98% across complex global environments.
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Fredrik Filipsson
Fredrik Filipsson brings over 20 years of experience in enterprise software licensing, having worked directly for IBM, SAP, and Oracle before co-founding Redress Compliance. Over the past 11 years as an independent advisor, he has helped more than 500 enterprise clients — including numerous Fortune 500 companies — optimise costs, avoid compliance risks, and secure favourable terms with major software vendors.