Understanding Capacity-Based Licensing for IBM Software

IBM capacity licensing works as follows:

  1. Install License: Based on each installed software copy on a physical or virtual disk​​.
  2. Managed Virtual Server License: Depends on the physical hardware resources of a server, with each distinct device requiring a separate entitlement​​.
  3. Processor Value Unit (PVU) License: Relies on processor technology and number, offering Full Capacity and Virtualization Capacity options​​.
  4. PVUs in Containers License: Licensing in a container depends on the number of processors available​​.
  5. Terabyte License: Based on the storage capacity available to the program, measured in terabytes​​.
  6. Virtual Processor Core (VPC) License: Depends on the number of virtual processor cores available​​.
  7. VPCs in Containers License: Similar to PVUs in Containers but focuses on Virtual Processor Cores​​.
  8. Virtual Server License: Based on the number of virtual servers available​

Eight Methods of IBM Capacity-Based Licensing

ibm capacity licensing

1. Install License

Definition: An Install License is based on each installed copy of a software program on a physical or virtual disk, capable of execution on a computer.

Key Point: Licensees are required to obtain an entitlement for each program installation.

2. Managed Virtual Server License

Definition: This licensing method is based on the physical hardware resources of a server.

What is a Server?: A server is a computer that executes commands, procedures, or applications for one or more users or client devices.

Virtual Servers are created by partitioning a physical server’s resources or utilizing an unpartitioned server.

Unique Device Consideration: Each distinct physical device, like a blade or rack-mounted device, is considered a separate server.

License Requirement: Entitlements are necessary for each virtual server that the program manages.

3. Processor Value Unit (PVU) License

ibm Processor Value Unit

Definition: PVU licensing depends on the processor technology and the number of processors accessible to the program.

Processor in PVU Context: IBM defines this as each processor core on a chip. For instance, a dual-core processor chip comprises two cores.

Licensing Options:

  • Full Capacity covers all activated processor cores in the physical hardware environment.
  • Virtualization Capacity (Sub-Capacity): Requires covering all cores available to or managed by the program, adhering to specific Virtualization Capacity License Counting Rules.

4. PVUs in Containers License

Understanding Containers: A container encapsulates software in a complete filesystem that includes everything needed to run: code, runtime, system tools, and libraries.

Licensing Model: The program’s licensing in a container depends on the number of processors available, akin to the standard PVU-based model.

5. Terabyte License

Measurement Basis: Licensing is determined based on the available storage capacity.

Understanding Terabyte: It equals 2^40 bytes.

License Requirement: An entitlement is necessary for each Terabyte of storage available to the program.

6. Virtual Processor Core (VPC) License

IBM Virtual Processor Core

Definition: VPC licensing depends on the number of virtual processor cores available.

Physical vs. Virtual Servers: Similar to the Managed Virtual Server License, but with a focus on processor cores.

Processor Core Explained: It’s a unit in a computing device that executes instructions.

VPC Specifics: A VPC can be a core in an unpartitioned Physical Server or a virtual core in a Virtual Server.

License Requirement: Entitlements are necessary for each VPC available to the program.

7. VPCs in Containers License

Container Context: Similar to the PVUs in Containers License, but based on the number of Virtual Processor Cores available to the program.

8. Virtual Server License

Definition: This licensing is based on the number of virtual servers available.

Server Considerations: Each physical device is viewed as a separate server for licensing purposes.

License Requirement: Entitlements are mandatory for each virtual server available to the program, irrespective of the processor cores or the number of program copies on the server.

FAQ About Capacity-Based Licensing

What is Capacity-Based Licensing?

Capacity-based licensing is a licensing model that determines the cost of a software license based on the capacity of the underlying infrastructure that the software runs on.

Why is Capacity-Based Licensing important?

Capacity-based licensing can be cost-effective for organizations with fluctuating demands or those looking to optimize costs. However, it can also be complex and requires careful management to ensure compliance.

Are you looking for expert guidance on Capacity-Based Licensing?

Redress Compliance is here to help!

Contact us today to learn more and ensure compliance while optimizing costs.


  • Fredrik Filipsson

    Fredrik Filipsson brings two decades of Oracle license management experience, including a nine-year tenure at Oracle and 11 years in Oracle license consulting. His expertise extends across leading IT corporations like IBM, enriching his profile with a broad spectrum of software and cloud projects. Filipsson's proficiency encompasses IBM, SAP, Microsoft, and Salesforce platforms, alongside significant involvement in Microsoft Copilot and AI initiatives, enhancing organizational efficiency.