Charles Schwab. 6 million dollars saved on IBM licensing and shelfware.

How Charles Schwab removed 6 million dollars of recurring IBM spend by reconciling entitlements to deployments before the renewal conversation.

What was the starting position?

Charles Schwab carried an IBM estate built through years of acquisitions and bundled enterprise deals. Entitlements, deployments, and support renewals had drifted apart, and the annual renewal repriced the entire historical list rather than what was actually running.

The brokerage needed the spend challenged without disturbing a complex production estate or triggering compliance questions mid exercise.

The estate at a glance

• Footprint: WebSphere, Db2, and Tivoli families under Passport Advantage, plus mainframe adjacent tooling.
• Drift: entitlement records years out of step with deployments after consolidation projects.
• Renewal posture: Subscription and Support renewing annually on the full historical entitlement list, with entitled fixes still drawn from IBM Fix Central on dead lines.

How did the engagement run?

The engagement ran as an entitlement to deployment reconciliation before anything was said to IBM. Every Passport Advantage entitlement was mapped against discovered deployments, and the sub capacity position was rebuilt on ILMT evidence.

Nothing was surrendered or renegotiated until the internal map was complete. Sequencing matters with IBM: the renewal conversation opens only after the baseline is defensible.

Finding the shelfware

The reconciliation surfaced licenses with no matching deployment across multiple product families: dead products from acquisitions, duplicate coverage after consolidations, and editions above what workloads used, several already past their support lifecycle dates. Each line was verified against discovery data twice before being marked for termination.

Rebuilding sub capacity

Virtualized middleware was being supported at levels that ignored sub capacity entitlement. Clean ILMT reporting re based the position on actual core consumption, cutting the supported PVU count materially without touching production.

Which buyer side moves closed the gap?

The decisive move was terminating support on undeployed entitlements in a single, evidence backed pass at the renewal. IBM reprices what remains; a reduced list negotiated once beats incremental trims spread over years.

1. Reconcile before renewal: the entitlement map was completed months ahead of the support anniversary.
2. Terminate in one pass: dead entitlements came off together, with deployment evidence attached.
3. Re base on sub capacity: ILMT reporting replaced full capacity assumptions on virtualized estates.
4. Reprice the remainder: the smaller, accurate list was then renegotiated on unit price.

Where the common advice on IBM cost optimization is wrong

The standard advice is to trim support gradually each year to avoid provoking IBM. We disagree. In roughly 20 of the 25 to 35 IBM estates Morten Andersen worked between 2024 and 2025, gradual trimming left 60 to 70 percent of identifiable shelfware still paying support three years later, because each cycle only removed what was politically easy. The buyer side move is one comprehensive, evidence backed reduction at a single renewal, with ILMT reporting clean enough to survive the compliance questions that follow. One defensible cut beats five timid ones.

IBM reprices the list you bring to the renewal. Bring the historical list and you pay history. Bring the reconciled list and you pay reality.

What was the commercial outcome?

Charles Schwab removed 6 million dollars of recurring IBM spend by eliminating shelfware support, re basing virtualized workloads on sub capacity evidence, and repricing the reduced entitlement list at renewal.

• Total saving: 6 million dollars of recurring annual support spend.
• Compliance posture: strengthened, with ILMT reporting now audit ready.
• Process: entitlement reconciliation now precedes every renewal cycle.

The operating rhythm that keeps it

Entitlement reconciliation now runs annually ahead of the support anniversary, with ILMT snapshots archived quarterly. The saving holds because the list IBM reprices each year stays accurate by routine, not by project.

What to do next

1. Export the full Passport Advantage entitlement list before your next renewal.
2. Map every entitlement to a discovered deployment; flag the orphans.
3. Verify ILMT coverage on every virtualized IBM workload.
4. Terminate support on undeployed entitlements in one documented pass.
5. Renegotiate unit pricing on the reduced list, not the historical one.
6. Stand up an annual reconciliation ahead of each support anniversary.

The IBM practice runs this reconciliation as a fixed scope engagement, and Vendor Shield keeps the position maintained year round. More client outcomes sit in the case study library.

Frequently asked questions

How much did Charles Schwab save on IBM licensing?

Charles Schwab removed 6 million dollars of recurring IBM spend. The saving came from terminating support on undeployed entitlements, re basing virtualized workloads on sub capacity evidence, and repricing the reduced list.

What is IBM shelfware and why does it persist?

Shelfware is entitlement you pay support on but never deploy. It persists because Subscription and Support renews on the prior entitlement list by default, and nobody reconciles that list against deployments before signing.

How does ILMT reduce IBM costs?

ILMT evidences sub capacity licensing, so virtualized workloads are licensed on the cores actually available to them rather than full machine capacity. Clean ILMT reporting often halves the licensed core count on dense virtual estates.

Is it risky to terminate IBM support in one pass?

Not if every termination is backed by deployment evidence verified before the renewal. The risk sits in trimming without reconciliation, which invites compliance questions you cannot answer from data.

Does this approach trigger an IBM audit?

It can draw scrutiny, which is why the sub capacity position was rebuilt on ILMT evidence first. An estate that reduces spend with audit ready reporting is in a far stronger position than one that trims quietly with gaps.