Case Study – IBM Licensing Optimization: Kuwait National Petroleum Company Saves $1.3M Through Internal Assessment
Background
Kuwait National Petroleum Company (KNPC), a subsidiary of the Kuwait Petroleum Corporation, is one of the largest oil refining and downstream companies in the Middle East.
With over 6,000 employees and multiple refineries, distribution hubs, and engineering centers, KNPC operates complex IT infrastructure to support production, logistics, finance, and environmental compliance systems.
KNPC has used IBM software for over 15 years, including products such as IBM WebSphere, Tivoli, Maximo, and DB2. These systems are embedded across mission-critical refinery operations and plant management workflows.
In 2024, KNPC’s internal audit team initiated a routine software compliance check and raised concerns over visibility and optimization of IBM license usage.
KNPC contacted Redress Compliance to conduct an internal IBM licensing assessment, optimize entitlements, and avoid the risk of future audit exposure or overspend.
The result: a fully compliant environment and $1.3 million in annualized cost savings through license optimization and entitlement restructuring.
Challenges
KNPC faced several IBM licensing and deployment challenges common to large-scale industrial organizations:
- Fragmented Licensing Data: Entitlements were spread across legacy purchase orders, enterprise agreements, and bundled oil & gas solution stacks. Tracking what was owned and in use was difficult.
- Unmonitored Virtualized Environments: Several IBM products were deployed in virtualized infrastructure, but proper sub-capacity licensing tools (like ILMT) were not consistently configured across all sites.
- Over-Provisioned Installations: In some cases, full-capacity licenses were being consumed when sub-capacity entitlements would have sufficed, leading to inflated licensing metrics.
- Product Metric Confusion: KNPC’s IT team lacked clarity on IBM’s evolving licensing metrics (e.g., PVU, RVU, user-based), making optimization risky without expert guidance.
- High Audit Sensitivity: Although no formal IBM audit was triggered, KNPC’s leadership wanted to address risks proactively before IBM or third-party auditors took action.
The goal was clear: gain clarity, reduce costs, and ensure long-term IBM compliance.
How Redress Compliance Helped
Redress Compliance deployed its IBM License Optimization Framework, tailored to KNPC’s industry, infrastructure, and licensing history.
1. Entitlement Review and Contract Consolidation
We began with a comprehensive review of KNPC’s IBM entitlements and contracts. Our team:
- Reconstructed licensing history across all business units and refinery IT teams
- Identified duplicate and overlapping licenses
- Normalized licensing terms, including software bundles purchased via industry-specific IBM programs
- Mapped license entitlements to deployment rights, versions, and metrics
This clarified KNPC’s effective license position (ELP), which became the foundation for safe optimization.
2. Deployment and Usage Analysis
Redress conducted a structured discovery of all IBM software installations, working directly with KNPC’s infrastructure and application teams.
We:
- Inventoried product installations across data centers and plant control rooms
- Analyzed processor and virtualization configurations
- Assessed ILMT deployment status and compliance with IBM’s sub-capacity rules
- Mapped installed products to active use cases and business dependencies
This analysis uncovered several inefficiencies, including unneeded WebSphere instances, unused DB2 databases, and redundant Maximo components.
3. Optimization Roadmap
Redress delivered a targeted license optimization strategy that:
- Rightsized entitlements based on actual usage
- Reassigned entitlements across teams and locations to avoid over-licensing
- Aligned metrics (e.g., PVUs) to infrastructure footprints for sub-capacity compliance
- Recommended decommissioning of idle components
- Provided a remediation plan for non-compliant ILMT configurations
We also delivered clear documentation to support all changes—so KNPC could confidently implement them without triggering audit flags.
4. Cost Reduction and Compliance Strategy
Finally, Redress worked with KNPC’s procurement and IT leadership to:
- Cancel or reduce unnecessary IBM support renewals for unused licenses
- Restructure internal licensing governance to track entitlements going forward
- Train asset management staff on IBM license metrics, measurement tools, and audit readiness
- Develop a renewal negotiation roadmap for future contract leverage
Outcome and Impact
KNPC realized measurable savings and strategic control within months:
- $1.3 million in annual savings, by terminating unused licenses and rightsizing support
- Zero compliance exposure, with all usage mapped and documented
- Improved ILMT compliance, reducing audit risk in virtualized environments
- Streamlined license governance, with clear responsibility and visibility
- Renewal readiness, putting KNPC in a stronger position for future IBM negotiations
By engaging Redress Compliance, KNPC transformed an internal compliance concern into a cost-saving, compliance-assured success story.
Client Quote
“Redress Compliance helped us bring clarity to a complex IBM environment. Their in-depth knowledge of licensing and focus on operational safety enabled us to reduce spend, mitigate risk, and establish a more effective licensing framework. The savings were immediate, but the long-term value is even greater.”
— IT Infrastructure & Vendor Manager, KNPC
Call-to-Action
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