How Redress Compliance eliminated $15 million in non-compliance exposure and achieved $6.5 million in recurring annual savings through mainframe MLC optimisation, workload rebalancing, legacy application decommissioning, and a long-term compliance governance framework.
| Client Overview | |
|---|---|
| Industry | Financial Services — Global Banking |
| Presence | Multiple Regions |
| IT Environment | Heavy mainframe reliance for transaction processing, risk management, and regulatory compliance |
| Issue | $15 million non-compliance exposure, high MLC costs, overprovisioned workloads, underutilised entitlements, and complex sub-capacity reporting |
| Services Provided | Comprehensive IBM Licensing Review, Mainframe MLC Optimisation, Workload Rebalancing, Compliance Framework Development |
| Outcome | $15M exposure reduced to $0. $6.5M annual savings achieved. 30% reduction in mainframe licensing costs. Full compliance with IBM mainframe terms. |
A global financial institution operating across multiple regions engaged Redress Compliance to conduct a comprehensive IBM licensing review, focusing on its mainframe environment. The institution relied heavily on mainframe systems for critical banking operations — including transaction processing, risk management, and regulatory compliance.
With high licensing costs and complex usage metrics, the organisation sought to ensure compliance, optimise licence usage, and reduce unnecessary expenses. The intricate nature of IBM's mainframe licensing structure — including Monthly Licence Charges (MLC) and sub-capacity rules — required specialised expertise to navigate effectively.
The institution faced $15 million in non-compliance exposure from discrepancies in mainframe usage reporting, overprovisioned workloads, and misaligned entitlements. IBM's mainframe licensing is among the most complex and expensive in the enterprise software landscape. MLC fees are calculated based on peak rolling four-hour average utilisation — meaning even short processing spikes can dramatically inflate costs. Without expert analysis, the institution was simultaneously overpaying on MLC and carrying significant hidden compliance risk.
IBM Monthly Licence Charges represent one of the largest recurring software costs for financial institutions. MLC fees are tied directly to peak mainframe utilisation — specifically the rolling four-hour average (R4HA) — meaning that workload scheduling, LPAR configuration, and processing peaks all directly impact how much you pay each month. Organisations that don't actively manage these variables routinely overpay by 20–40%.
Redress Compliance conducted a four-phase engagement covering licensing analysis, non-compliance identification, cost optimisation, and long-term governance:
Financial institutions are uniquely exposed to IBM mainframe MLC inflation because their processing patterns feature sharp peaks during market hours, end-of-day batch processing, and month-end/quarter-end cycles. These peaks directly drive the rolling four-hour average that determines MLC costs. By rebalancing workloads — scheduling batch jobs outside peak windows, optimising LPAR capping strategies, and retiring legacy applications that unnecessarily consume capacity — organisations can achieve 25–40% reductions in MLC without any loss of processing capability or performance.
The institution's entire $15 million non-compliance exposure was eliminated through accurate sub-capacity reporting, entitlement realignment, and remediation of usage discrepancies.
The institution moved from significant hidden risk to fully documented, verifiable compliance with all IBM mainframe licensing terms — audit-ready at any time.
Workload rebalancing strategies reduced peak utilisation, directly lowering Monthly Licence Charges by $5 million per year.
Legacy mainframe applications no longer required were identified and retired, freeing resources and reducing annual costs by $1.5 million.
Combined MLC optimisation and decommissioning delivered $6.5 million in recurring annual savings — year after year.
| Metric | Result |
|---|---|
| Mainframe Licensing Cost Reduction | 30% reduction in overall mainframe licensing costs |
| Processing Peak Reduction | 25% reduction in processing peaks through workload rebalancing |
| Software Portfolio | Streamlined mainframe software portfolio — improved IT governance across all regions |
| Resource Allocation | Improved efficiency in mainframe resource allocation and LPAR configuration |
| Compliance Posture | Fully compliant with IBM mainframe licensing terms — audit-ready |
| Governance | Automated monitoring, regular audit schedule, and trained IT/operations teams |
"Redress Compliance's expertise in IBM mainframe licensing was invaluable. Their recommendations not only ensured compliance but also unlocked significant cost savings. We're now operating more efficiently, with a clear strategy for long-term cost management and scalability."
| Key Result | Detail |
|---|---|
| Initial Exposure | $15,000,000 |
| Final Exposure | $0 — fully remediated |
| Annual Savings | $6,500,000 ($5M MLC + $1.5M decommissioning) |
| Cost Reduction | 30% reduction in overall mainframe licensing costs |
| Peak Reduction | 25% reduction in processing peaks |
| Compliance | Fully compliant with all IBM mainframe licensing terms |
Watch how we help enterprises navigate IBM licensing challenges and optimisation
If your organisation relies on IBM mainframe systems and wants to ensure compliance, reduce MLC costs, and optimise your licensing position — contact us today. Our independent IBM licensing experts have helped financial institutions save tens of millions through mainframe optimisation.
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Fredrik Filipsson is the co-founder of Redress Compliance, a leading independent advisory firm specialising in Oracle, Microsoft, SAP, IBM, and Salesforce licensing. With over 20 years of experience in software licensing and contract negotiations, Fredrik has helped hundreds of organisations — including numerous Fortune 500 companies — optimise costs, avoid compliance risks, and secure favourable terms. Fredrik built his expertise over two decades working directly for IBM, SAP, and Oracle.