How a leading US financial services firm with 34 million+ client accounts and $8 trillion in assets saved $6M through systematic shelfware elimination, licence metric normalisation, support cost rationalisation, and IBM entitlement realignment across DB2, WebSphere, MQ, Cognos, and Tivoli.
The Charles Schwab Corporation is a leading U.S.-based financial services firm offering 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 back-end systems operate at massive scale, with full regulatory compliance and zero tolerance for downtime.
Over years of business expansion, acquisitions, and platform migrations, Schwab’s IBM licensing footprint had become increasingly fragmented and duplicative. The company relied on a broad portfolio of IBM enterprise software, including DB2, WebSphere, MQ, Cognos, and Tivoli, but many products remained on the books under active support despite no longer being used. Inconsistent licensing metrics (PVU, RVU, user-based) across regions and departments made optimisation difficult. IBM showed little interest in helping identify unnecessary spend.
By engaging Redress Compliance for a comprehensive IBM licensing assessment, Charles Schwab identified and eliminated $6 million in unnecessary IBM costs through shelfware termination, licence metric normalisation, support rationalisation, and entitlement realignment. All without any operational risk or compliance exposure.
| Metric | Before | After | Impact |
|---|---|---|---|
| Annual IBM spend | Growing annually | Reduced by $6M | $6M total savings |
| Shelfware | Substantial across DB2, Cognos, Tivoli | Identified and terminated | ~$3.5M eliminated |
| Licence metric consistency | Mixed PVU, RVU, user-based | Normalised per product | Over-spend eliminated |
| Entitlement documentation | Fragmented across legacy contracts | Fully reconstructed | Audit-ready |
| Compliance position | Uncertain | Fully compliant | Zero audit risk |
| Vendor relationship | Vendor-driven | Data-driven | Better renewal leverage |
Charles Schwab’s $6M in IBM savings came from a proactive licensing assessment, not an audit response. Shelfware elimination, licence metric normalisation, and entitlement reconstruction revealed that a substantial portion of IBM spend was going to products and capacity not being used.
Charles Schwab’s IBM licensing challenges reflected a pattern common to large, long-tenured IBM customers in financial services. Decades of technology investment, acquisitions, and platform evolution create a sprawling IBM estate where cost visibility is poor and waste accumulates silently.
Shelfware accumulation. Shelfware is software that is licensed and under active support but no longer deployed or used. It is the most common source of waste in enterprise IBM estates. At Charles Schwab, shelfware had accumulated through platform migrations where old IBM products were replaced but never formally terminated, system upgrades where newer versions were licensed while older versions remained on the books, acquisitions where duplicative IBM products were absorbed without rationalisation, and module-level overbuying where entire product suites were purchased when only specific components were needed.
Each unused product continued to incur full IBM support fees, typically 20 to 22% of the licence value annually. Understanding IBM cost optimisation and shelfware reduction strategies is critical for every large IBM customer.
Inconsistent licensing metrics. IBM uses multiple licensing metrics. PVU (Processor Value Unit), RVU (Resource Value Unit), Authorised User, and Concurrent User are all applied to different products in the same estate. Without normalisation, it is impossible to identify where licences are over-allocated or misaligned with actual usage.
| Challenge | Impact | Root Cause |
|---|---|---|
| Shelfware accumulation | Full support fees on unused products | Migrations, upgrades, acquisitions |
| Mixed licensing metrics | Impossible to optimise without metric-by-metric analysis | Different IBM products use different metrics |
| Fragmented entitlements | Unclear what Schwab owns vs pays for | Decades of contracts and acquisitions |
| Poor deployment visibility | Inconsistent tracking across environments | Decentralised IT; rapid provisioning |
| High support renewal costs | Minor products carry disproportionate fees | IBM support pricing model |
| Vendor inertia | IBM offered cloud bundles, not cost reduction | Sales incentives reward new spend |
List every IBM product under active support. Cross-reference your IBM Passport Advantage agreement with actual deployments. Any product on the support renewal list that is not actively deployed is shelfware.
Check for post-migration residuals. After every platform migration or upgrade, verify that old IBM products were formally terminated.
Review acquisition-inherited licences. If you have acquired companies that used IBM products, those licences were absorbed into your estate. Many are duplicative or unused but still incurring support fees.
Our independent IBM licensing specialists have helped enterprises worldwide eliminate millions in unnecessary IBM costs. Fixed-fee engagements with guaranteed ROI.
Talk to an IBM Specialist →The first phase established a complete, accurate record of every IBM licence and entitlement Charles Schwab owned. This replaced the fragmented, incomplete documentation that had accumulated over years of contracts, amendments, and acquisitions.
Contract archaeology. The advisory team conducted a comprehensive review of Schwab’s IBM contract history, spanning Passport Advantage agreements, Enterprise License Agreements (ELAs), individual ordering documents, amendments, and entitlement certificates.
| IBM Product Family | Licence Metric | Entitlement Sources | Complexity |
|---|---|---|---|
| DB2 Enterprise | PVU | Original purchases + ELA + acquisition transfers | High |
| WebSphere App Server | PVU | Original purchases + ELA | Medium |
| IBM MQ | PVU | Original purchases + acquisition | Medium |
| Cognos Analytics | RVU / Authorised User | Multiple departmental purchases | High |
| Tivoli Suite | PVU / RVU / User | Legacy purchases; partially migrated | High |
The entitlement gap. The reconstruction revealed that Schwab’s IBM entitlements were approximately 35 to 40% larger than actual deployment requirements. This excess included shelfware, over-allocated PVU capacity, and duplicative entitlements from acquisitions.
With entitlements reconstructed, the second phase mapped actual IBM software usage across the entire estate. Every instance where licensed products were not being used, were not being used at their licensed capacity, or were duplicated across environments was identified.
The advisory team used a combination of ILMT scan data, infrastructure monitoring, CMDB records, and application portfolio management data to map every IBM software deployment.
| IBM Product | Shelfware Type | Annual Cost | Root Cause |
|---|---|---|---|
| Cognos modules | Not deployed; replaced by modern BI | ~$800K | Migration; never terminated |
| Tivoli ITM/ITCAM | Partially migrated; legacy on support | ~$650K | Monitoring modernisation |
| DB2 legacy instances | Decommissioned; still under support | ~$550K | Consolidation/migration |
| WebSphere editions | ND where Liberty/Base sufficient | ~$400K | Over-licensed at purchase |
| MQ excess capacity | PVU above actual throughput | ~$350K | Licensed for peak never reached |
| Acquisition duplicates | Overlapping from acquired company | ~$450K | Post-acquisition not rationalised |
| Other miscellaneous | Various smaller products | ~$300K | Accumulated over years |
| Total shelfware | — | ~$3.5M/year | — |
Over-allocation analysis. Beyond outright shelfware, the assessment identified products deployed but licensed at significantly higher capacity than required. These over-allocations represented an additional ~$2.5M in annual support waste.
Cross-reference ILMT scans against Passport Advantage entitlements. Any product on your PA agreement that does not appear in ILMT scan data is likely shelfware.
Check for post-migration residuals. Every platform migration should trigger a licence review.
Recalculate PVU allocations for current hardware. Newer processors often require fewer PVUs per core.
Audit named user licences against active directories. Departed employees create ghost licences.
Use our IBM assessment tools to identify shelfware, audit exposure, and optimisation opportunities across your IBM estate.
Start Free Assessment →With shelfware identified and over-allocations quantified, the third phase executed a structured optimisation programme. Unused products were terminated, active licences right-sized, and the IBM support relationship restructured.
| Product | Optimisation Action | Annual Savings |
|---|---|---|
| DB2 Enterprise | PVU reduced; decommissioned instances terminated | $850K |
| WebSphere | Network Deployment converted to Liberty/Base | $600K |
| Cognos Analytics | Unused modules terminated; user counts reconciled | $950K |
| Tivoli Suite | Legacy monitoring terminated | $750K |
| IBM MQ | PVU allocation right-sized | $450K |
| Acquisition duplicates | Consolidated to single entitlement set | $500K |
| Other products | Various terminations and right-sizing | $400K |
| Total | — | ~$4.5M/year |
The advisory team also reviewed support pricing against market benchmarks, identifying opportunities to negotiate improved renewal terms based on the reduced footprint.
The final phase established governance controls ensuring that the $6M in savings would be sustained, and that IBM licensing waste would never again accumulate to this level.
| Governance Element | Description | Long-Term Impact |
|---|---|---|
| Procurement gate | Licence review before any new IBM purchase | Prevents over-buying |
| Quarterly ILMT review | Usage vs entitlement comparison every 90 days | Continuous shelfware identification |
| Migration licence check | IBM review triggered by infrastructure change | Prevents post-migration shelfware |
| Acquisition integration | 90-day IBM assessment for every acquired company | Immediate duplicate identification |
| Entitlement register | Living record of all licences, metrics, usage | Audit readiness |
| Annual renewal strategy | Pre-renewal assessment and negotiation planning | Optimised pricing |
For organisations looking to implement similar governance structures, third-party support strategies can provide additional leverage.
| Outcome Area | Result |
|---|---|
| Total cost savings | $6M |
| Shelfware eliminated | ~$3.5M/year across Cognos, Tivoli, DB2, WebSphere, MQ |
| Over-allocation recovered | ~$2.5M in excess PVU/RVU/user capacity |
| IBM estate reduction | 35–40% identified as unused or over-allocated |
| Compliance position | Fully verified |
| Governance framework | Procurement gates, quarterly reviews, migration checks |
The compounding effect. By eliminating $6M in unnecessary licensing, Schwab avoids approximately $1.2 to $1.3M in annual support fees that would have compounded indefinitely. Over five years, the cumulative savings from support avoidance alone exceed $6.5M.
“We thought our IBM licensing was well managed. But Redress showed us that well-managed and optimised are two very different things. Thirty-five percent of our IBM estate was either unused or over-allocated. The $6 million in savings was significant, but the governance framework ensures we will never accumulate that level of waste again.”
1. Shelfware is universal and invisible. Every large IBM customer has shelfware. It accumulates silently through migrations, upgrades, acquisitions, and organisational changes. The typical IBM estate contains 25 to 40% shelfware by value.
2. IBM will not help you optimise. IBM’s account teams are compensated on revenue. They will offer cloud migration bundles and subscription conversions, all of which increase spend. Independent assessment is the only reliable path.
3. Entitlement reconstruction is the foundation. You cannot optimise what you cannot see. Most large IBM customers do not have a complete, accurate record of their entitlements.
4. Acquisitions create licensing debt. Every acquisition brings duplicative IBM licences and inherited shelfware. Without structured integration, the waste is absorbed.
5. PVU recalculation is a hidden lever. When you refresh hardware, the PVU requirement per core may change. Recalculating against current hardware can reveal significant over-licensing.
| Client | Industry | Savings | Approach |
|---|---|---|---|
| Mizuho Financial | Banking | $71M | Mainframe licence restructuring |
| Samsung | Technology | $23M | Comprehensive estate optimisation |
| Indosat | Telecom | $8M | Proactive licence right-sizing |
| Charles Schwab | Financial Services | $6M | Shelfware termination + right-sizing |
| NY Financial Institution | Financial Services | $198.8M avoided | Full-capacity claim elimination |
| US Technology Firm | Technology | $82M → $600K | ILMT remediation + K8s defence |
| # | Action | Timing | Impact |
|---|---|---|---|
| 1 | Reconstruct your IBM entitlement position. | Immediate | Foundation for all optimisation |
| 2 | Cross-reference entitlements against ILMT data. | Within 30 days | Identifies 25–40% unused |
| 3 | Recalculate PVU requirements for current hardware. | Within 30 days | Identifies over-allocated licences |
| 4 | Terminate shelfware before the next renewal. | Before renewal | Immediate support fee elimination |
| 5 | Right-size active licences. | Within 60 days | Additional savings |
| 6 | Implement governance controls. | Within 90 days | Prevents reaccumulation |
| 7 | Engage independent IBM licensing expertise. | At programme start | Maximises savings |
Charles Schwab found 35 to 40% of its IBM estate was unused or over-allocated. $6M in savings, with compounding support fee avoidance of $1.2 to $1.3M annually. Every large IBM customer has a similar opportunity. The only question is whether you find the waste before IBM’s next renewal or audit. To understand your specific exposure, book a confidential call with our team.
Through a four-phase programme: entitlement reconstruction, usage discovery identifying ~$3.5M/year in shelfware and ~$2.5M in over-allocated capacity, systematic termination and right-sizing across DB2, WebSphere, Cognos, Tivoli, and MQ, and governance framework implementation.
Shelfware is IBM software that is licensed and under active annual support but no longer deployed or used. It accumulates through migrations, upgrades, acquisitions, and over-buying. Typical IBM estates contain 25 to 40% shelfware by value.
IBM charges annual support at approximately 20 to 22% of the licence value. This fee is charged on every product under the Passport Advantage agreement, whether or not the product is being used.
Yes. Under IBM Passport Advantage, you can discontinue support on products you no longer use. You retain the perpetual licence right but lose access to updates and support.
PVU (Processor Value Unit) requirements depend on processor type and core count. When hardware is refreshed, the PVU-per-core value may change. Recalculating against current hardware can reveal over-licensing.
IBM’s account teams are compensated on revenue. Identifying and terminating unused products reduces revenue. Independent assessment is the only reliable path.
Every acquisition brings the acquired company’s IBM licences into the parent estate. These often duplicate existing products or include inherited shelfware.
Procurement gates, quarterly ILMT usage reviews, migration/upgrade licence checks, acquisition integration playbooks, and a maintained entitlement register.
Redress provides independent IBM licensing assessment: entitlement reconstruction, ILMT analysis, shelfware identification, PVU/RVU right-sizing, support termination management, and governance implementation. Fixed-fee, 100% vendor-independent.
Very common. Financial services firms have long IBM tenures, frequent acquisitions, and conservative decommissioning practices. Typical estates contain 30 to 45% waste.
IBM’s account teams are compensated on revenue, not your efficiency. They will offer cloud bundles and subscription conversions, all of which increase your spend. Independent assessment is the only reliable path to IBM optimisation.