Executive Summary: $6M Saved Through IBM Shelfware Elimination
The Charles Schwab Corporation is a leading US-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 (Processor Value Unit), RVU (Resource Value Unit), 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.
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Get Expert Help →The Challenge: IBM Licensing Complexity in Financial Services
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. 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.
Inconsistent licensing metrics. IBM uses multiple licensing metrics — PVU (Processor Value Unit), RVU (Resource Value Unit), Authorised User, and Concurrent User — 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. Understanding IBM cost optimisation and shelfware reduction strategies is critical for every large IBM customer.
Phase 1: Entitlement Reconstruction
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. The advisory team conducted a comprehensive review of Schwab's IBM contract history, spanning Passport Advantage agreements, Enterprise License Agreements, individual ordering documents, amendments, and entitlement certificates.
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. IBM products covered included DB2 Enterprise (PVU), WebSphere Application Server (PVU), IBM MQ (PVU), Cognos Analytics (RVU and Authorised User), and the Tivoli Suite (PVU, RVU, and User).
Phase 2: Usage Discovery and Shelfware Analysis
With entitlements reconstructed, the second phase mapped actual IBM software usage across the entire estate. 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.
Shelfware identified by product area totalled approximately $3.5 million annually: Cognos modules not deployed after migration to modern BI (~$800K), Tivoli ITM/ITCAM partially migrated to replacement monitoring (~$650K), DB2 legacy instances decommissioned but still under support (~$550K), WebSphere Network Deployment editions where Liberty/Base was sufficient (~$400K), MQ excess PVU capacity allocated for peak throughput never reached (~$350K), acquisition duplicate licences overlapping from an acquired company (~$450K), and miscellaneous smaller products (~$300K).
Beyond outright shelfware, the assessment identified products deployed but licensed at significantly higher capacity than required — representing an additional approximately $2.5M in annual support waste from over-allocation.
Phase 3: Optimisation and Termination Strategy
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:
- DB2 Enterprise — PVU reduced; decommissioned instances terminated — $850K annual savings
- WebSphere — Network Deployment converted to Liberty/Base editions — $600K annual savings
- Cognos Analytics — unused modules terminated; user counts reconciled — $950K annual savings
- Tivoli Suite — legacy monitoring terminated — $750K annual savings
- IBM MQ — PVU allocation right-sized to actual throughput — $450K annual savings
- Acquisition duplicates — consolidated to single entitlement set — $500K annual savings
- Other products — various terminations and right-sizing — $400K annual savings
The advisory team also reviewed support pricing against market benchmarks, identifying opportunities to negotiate improved renewal terms based on the reduced footprint. Total optimisation delivered: approximately $4.5M in direct product savings plus $1.5M in support cost rationalisation, combining to $6M total.
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Send Us a Message →Results and Key Takeaways
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. All without any operational risk or compliance exposure. The engagement also repositioned Schwab for significantly better renewal terms — with a reduced, validated IBM footprint, IBM's audit leverage was eliminated and the firm had accurate data to challenge renewal pricing.
For large financial institutions running complex IBM estates built up over decades, this pattern of 35 to 40% excess entitlement is the norm rather than the exception. IBM's commercial model rewards incumbent spend — there is no financial incentive for IBM account teams to proactively identify opportunities to reduce a customer's licence costs. Independent advisory is the only mechanism that consistently surfaces and eliminates this waste.
For further context on IBM licensing strategy in financial services, see our IBM Licensing Knowledge Hub. To assess your organisation's current IBM position, explore our IBM licensing assessment tools. To discuss an independent review of your IBM estate, get in touch with our advisory team.
Related Resources
- IBM Advisory Services
- IBM Licensing Knowledge Hub
- IBM ELA Renewal Advisory
- IBM Audit Defence Kits
- IBM Licensing Assessment Tools