Case Study – IBM Licensing Optimization: Charles Schwab Saves $6M by Eliminating Shelfware and Optimizing IBM Licensing
Background
The Charles Schwab Corporation is a leading U.S.-based financial services firm that offers brokerage, wealth management, banking, and advisory solutions to over 34 million client accounts.
With more than $8 trillion in total client assets under management, Schwab’s digital platforms and backend systems must operate at massive scale, with full regulatory compliance and zero tolerance for downtime.
The company has historically relied on a variety of IBM enterprise software solutions to support core operations, including DB2, WebSphere, MQ, Cognos, and Tivoli.
Over time, as the business expanded through acquisitions and internal growth, Charles Schwab’s IBM licensing footprint became increasingly fragmented, duplicative, and difficult to manage.
In 2024, Schwab’s IT asset management team commissioned Redress Compliance to lead a comprehensive IBM licensing assessment. The objective was twofold: (1) identify unused software under active support (“shelfware”) and (2) optimize license allocation and entitlement usage.
The result: a fully compliant IBM estate with $6 million in cost savings, achieved by terminating redundant entitlements and realigning licensing to reflect actual needs.
Challenges
Even with strong internal procurement and compliance processes, Charles Schwab faced several challenges specific to IBM’s licensing and commercial model:
- Shelfware Accumulation: After multiple system upgrades and platform migrations, many IBM software components remained on the books—but weren’t being actively used. These products still incurred full support costs annually.
- Inconsistent Licensing Metrics: Schwab had a mix of PVU, RVU, and user-based licensing metrics across regions and departments, making optimization difficult without normalization.
- Lack of Centralized Visibility: IBM software was deployed across development, test, and production environments—with varying levels of license tracking and documentation.
- High Support Renewal Costs: Even minor IBM products or modules came with disproportionately high annual support fees, making even small inefficiencies expensive.
- Vendor Inertia: IBM had shown little interest in helping Schwab identify unused software, instead pushing cloud migration bundles and license upgrades.
Redress Compliance was brought in to deliver an independent, data-driven licensing review that could cut through the complexity and reduce unnecessary cost without operational risk.
How Redress Compliance Helped
Redress executed a structured IBM license assessment, combining entitlement analysis, usage validation, and contract strategy.
1. Entitlement Reconstruction
We began by collecting and analyzing all IBM license documentation across Schwab’s IT and procurement landscape. Our team:
- Consolidated over a decade of IBM purchase records, contracts, and support renewals
- Normalized entitlements across products and metrics to establish a consistent license inventory
- Identified where historical purchases had outlived their technical relevance but were still incurring costs
This allowed us to establish Schwab’s Effective License Position (ELP)—the starting point for cost reduction.
2. Usage Discovery and Shelfware Analysis
Working with Schwab’s infrastructure and application leads, Redress mapped active IBM software deployments across the enterprise. We:
- Identified inactive software still under support (e.g., unused Cognos modules, legacy DB2 instances)
- Flagged IBM components that were still technically deployed but no longer actively used or required
- Assessed whether entitlements could be reallocated or formally terminated
- Verified usage by IBM’s product-specific licensing rules
In total, Redress uncovered over $4.5 million in software under support that had no active usage—a classic case of shelfware.
3. Optimization and Termination Strategy
With a validated baseline, we delivered a multi-phase optimization plan:
- Shelfware Termination: Schwab was able to safely terminate support for unused licenses, in line with IBM’s rules and timelines
- License Realignment: Entitlements were reassigned across environments to better match usage and avoid new purchases
- Renewal Strategy: Schwab’s procurement team received a vendor negotiation plan for reducing support costs in future renewals
- Governance Enhancements: We delivered license tracking templates and reporting logic to prevent shelfware from reaccumulating
All recommendations were audit-safe and backed by contractual language.
Outcome and Impact
Charles Schwab realized significant financial and strategic benefits from the engagement:
- $6 million in total savings, including:
- ~$4.5M from shelfware license termination
- ~$1.5M from realignment and internal reallocation
- Zero compliance exposure, with all actions reviewed against IBM’s licensing terms
- Improved internal governance, with clear visibility into IBM software deployment and entitlements
- Renewed vendor leverage, allowing Schwab to approach future renewals with a clean, optimized baseline
- No disruption to operations, as all changes were made behind the scenes without impacting critical systems
The company emerged with a leaner, more strategic IBM licensing footprint—and long-term controls in place.
Client Quote
“IBM licensing has always been complex, but Redress Compliance gave us a clear, actionable view of our estate. They identified software we didn’t even realize we were still paying for, and helped us exit it safely. Their expertise led directly to $6 million in savings—and stronger governance going forward.”
— Director, Enterprise IT Sourcing, Charles Schwab
Call-to-Action
Are you paying for IBM software you no longer use? Redress Compliance helps financial institutions, such as Charles Schwab, eliminate shelfware, reduce costs, and maintain full compliance.
Schedule your IBM licensing assessment today.
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