This FAQ provides answers to common questions about IBM mainframe software licensing. It covers licensing models, compliance, contracts, product-specific nuances, usage metrics, cost optimization, and best practices. It is organized for both newcomers and experienced professionals.
IBM Mainframe Licensing Models
Q1: What are the main IBM mainframe software licensing models?
A: IBM uses two primary licensing models for mainframe software: Monthly License Charge (MLC) and one-time charge licenses under the International Program License Agreement (IPLA). MLC is a recurring monthly charge model applied to core products, such as the operating system (z/OS) and major middleware (e.g., CICS, Db2, IMS, WebSphere MQ). IPLA refers to perpetual licenses where you pay an upfront One-Time Charge (OTC) for the software and optionally purchase annual support for updates. In summary, MLC is a usage-based subscription, while IPLA is a traditional purchase model with ongoing maintenance.
Q2: What is the monthly license charge (MLC) for IBM mainframe licensing?
A: MLC (Monthly License Charge) is a subscription-style licensing model where you pay a monthly fee to use the software. Charges are typically based on the system’s capacity or usage (measured in MSUs) during peak usage. MLC covers essential IBM Z software, including z/OS, CICS, Db2 for z/OS, IMS, and MQ. The monthly fee includes IBM support and product maintenance updates. Because billing is usage-based, optimizing workload timing and capacity can directly impact monthly MLC costs.
Q3: What is the International Program License Agreement (IPLA) licensing model?
A: IPLA is IBM’s one-time charge licensing model for mainframe software. Under IPLA, you purchase a perpetual license for a software product upfront (the OTC), and then you may pay an annual Subscription & Support (S&S) fee for ongoing support and version upgrades. IPLA licenses do not incur monthly usage charges.
Many tools and utilities on IBM Z (as well as some middleware) use IPLA. Notably, IPLA offerings can be sub-capacity licensed, meaning you can license less than the full machine capacity if the software only runs on part of the system. This model is ideal for products you want to own indefinitely and only pay yearly maintenance.
Q4: How does sub-capacity pricing work on IBM mainframes?
A: Sub-capacity pricing allows you to pay for software based on a partition’s actual utilized capacity (peak usage) rather than the full machine size. In an MLC context, IBM measures the highest 4-hour rolling average utilization of each relevant LPAR (logical partition) to determine the billable MSUs for the month.
If you don’t use the mainframe’s full power, you pay only for the portion you use, potentially saving costs. To use sub-capacity pricing, you must meet IBM’s requirements (e.g., run eligible OS levels on 64-bit hardware and regularly run IBM’s Sub-Capacity Reporting Tool). Sub-capacity pricing is also available for many IPLA (OTC) products, where the license capacity can be based on the specific LPARs where the software runs. In short, sub-capacity licensing aligns fees to your workload, which is useful if your peak usage is much lower than your machine’s total capacity.
Q5: What is the difference between full-capacity and sub-capacity licensing?
A: The difference lies in whether charges are based on the entire physical machine capacity or only the used portion. Full-capacity licensing charges assume the software uses the full rated capacity of the mainframe (all MSUs of the machine), regardless of actual usage. In contrast, sub-capacity licensing charges are based on the software’s peak utilization in its partition (the highest 4-hour average usage during the month).
With full capacity, even if the workload is small, you’ll pay as if it were using the whole machine. Sub-capacity allows costs to scale down when workloads are contained to a subset of the machine. Most modern IBM Z environments use sub-capacity pricing to optimize costs, but it requires meeting IBM’s criteria (such as running in 64-bit mode and using IBM’s reporting tools). In summary, full capacity = pay for the maximum potential capacity; sub-capacity = pay for the actual peak usage.
Q6: What is IBM’s Tailored Fit Pricing (TFP) for mainframe software?
A: Tailored Fit Pricing is a newer IBM licensing model designed to simplify and stabilize mainframe software costs. It offers a more predictable pricing structure by charging a fixed annual rate or a flexible consumption-based rate for all your workloads rather than individually metering each product’s MSUs.
There are two TFP options: an Enterprise Consumption Solution (usage-based, where you prepay for a certain capacity and can consume up to that amount in aggregate) and an Enterprise Capacity Solution (a fixed cost for a defined capacity tier). TFP often involves a multi-year contract with IBM and is designed for hybrid IT environments to provide transparency and potentially better pricing if your usage increases.
In practical terms, TFP can eliminate the need to constantly track rolling peaks for each product – it’s like an all-you-can-eat model up to a limit, which can reduce the administrative overhead of managing individual MLC charges.
Q7: What is the difference between MLC and IPLA licensing?
A: MLC and IPLA represent fundamentally different licensing approaches. MLC (Monthly License Charge) is a usage-based subscription model—you pay monthly for the right to use the software, and the cost varies based on your system usage or size. The fee includes support, and you can always get the latest version as long as you’re a paying customer.
In contrast, IPLA is a perpetual license model – you pay once for a license to use a specific software version indefinitely. If you want upgrades and support, the ongoing costs for IPLA are only the optional annual support and service (S&S) fees.
Another key difference is flexibility: MLC can adjust to short-term needs (you can start or stop using a product, and costs stop accordingly), whereas IPLA is a fixed investment but could be cheaper over the long term if you use the product continuously. MLC = recurring operational expense, IPLA = upfront capital expense (plus maintenance). Both models can use sub-capacity metering, but their cost structures and ownership differ.
Q8: How do perpetual, subscription, and term licensing differ on IBM mainframes?
A: These terms describe the duration and payment structure of a license:
- Perpetual license: You buy the software once and can use it indefinitely. On IBM mainframes, IPLA offerings are perpetual—you own the rights to that software version forever. If you want continued support and upgrades, you typically pay a one-time charge and then a yearly Subscription and Support (S&S). If you stop paying for S&S, you can still use the last version you obtained, but you won’t get updates.
- Subscription license: You pay for the right to use the software for a specified period (e.g., monthly or annually) and must continue to pay to use it. MLC software is a subscription-based service – if you stop paying the monthly charge, you will no longer be authorized to use the product. The cost is recurring, and support is bundled in the fee.
- Term license: This is a time-limited license, typically for a specific duration, such as 1 or 3 years. It expires unless renewed. It’s like a short-term rental. IBM sometimes offers term licenses for certain products or as part of enterprise agreements. In the mainframe context, a term license might be used for a temporary project or to align with a contract period. It’s less common than the other two models, but you have rights to the software only for the agreed-upon terms.
In summary, perpetual means buy and own indefinitely, subscription means pay-as-you-go continuous use, and term means use for a fixed period. Most “subscription” styles on IBM Z use the MLC monthly billing, and “perpetual” is via IPLA. Term licensing might appear in special deals or trials.
