IBM United States
Software Announcement 203-082
March 25, 2003

New and Clarified Terms and Conditions for IBM S/390 and eServer zSeries Software

 ENUS203-082.PDF (15KB)

At a Glance

IBM is implementing changes and clarifications to establish a worldwide standard for S/390 and zSeries software recurring charges:

  1. Recurring charges will be calculated in full month increments.
  2. Test period is being eliminated.
  3. Monthly license charges (MLCs) will be invoiced quarterly.
  4. Other MLC clarifications and changes were recently established:
    • Sub-Capacity Reporting Tool (SCRT) reporting frequency is changed to monthly.
    • Single version charge (SVC) under sub-capacity variable workload license charge (VWLC) eligibility rules are broadened and charges modified.


IBM is announcing changes and clarifications for recurring charge software on S/390® and zSeries™ platforms to help transform our business to a globally consistent and e-business compatible model. These changes will reduce the volume of invoices and retroactive billing adjustments, improve accuracy of invoices, and thus reduce the associated costs for invoice reconciliation.

Contact your IBM representative if you require more detailed information or have questions about how this announcement applies to you.

Planned Availability Date

July 1, 2003


Changes to Software Recurring Charge Billing

The expense required to reconcile recurring charges will be significantly reduced when the following changes, already announced and established in some geographies, are implemented as a worldwide standard:

  1. Recurring charges (for example, MLC, ALC, S&S) will be calculated in full calendar month increments.
    • New installations and product alterations (other than discontinuances) on the first of a month that result in changes to charges will begin charging for the change immediately in that month.
    • New installations and product alterations after the first day of the month that result in changes to charges will begin charging for the change beginning the first day of the month after installation.
    • Products discontinued in a month will be charged through to the end of the month.
    • Annual license charges (ALCs) and annual Subscription and Support charges (S&S) may be aligned to the first day of any calendar month requested by the customer.
      • For new products, if an alignment month is not chosen, the charges for a period of one year will be invoiced the first day of the month following product installation. If the product is installed on the first of a month, the charge will be invoiced that same day.
      • For new and existing products, when an alignment results in a change in a product anniversary date, a pro-rata adjustment charge will be invoiced to align ALC licenses or S&S to the chosen date. For existing products, the pro-rata charge will be calculated from the day of the previous anniversary to the new anniversary date which falls on the first of a month.
  2. The no charge test period will be withdrawn for existing programs, and will not be available for future programs. Customers who have started a test period before the effective date can complete the test period without charge. When the test period ends, the license becomes chargeable and reflected in billing the following month.
  3. Calendar Quarterly Invoicing for monthly charges will occur in the first month of the calendar quarter. If there are changes to charges during the first or second month of the quarter, an interim billing for those changes will be issued the next month covering the period from the change to the end of the quarter.

Other MLC Changes and Clarifications Recently Established

SCRT Reports: The change from LPAR Defined Capacity to Product LPAR utilization, effective July 1, 2002 (refer to Software Announcement 202-105 , dated April 30, 2002), provides a more granular measurement of the actual product utilization MSUs. As this increases the likelihood of capacity changes, starting June 1, 2003, SCRT reports must be submitted monthly (due no later than the ninth of the following month) to qualify for Sub-Capacity pricing on zSeries or equivalent processors. Failure to submit a machine's Sub-Capacity Report will result in programs on that machine being charged on a Full-Capacity MSU basis for that month. The Attachment for Workload License Charges — PreILM (Z125-6516) is being updated to reflect this change.

Eligibility for SVC and Calculation of Charges

SVC Eligibility: Consistent with the SVC announcement on September 13, 1994, the following SVC rules apply:

SVC allows a customer to pay only for the more current version of selected programs when both versions of a program are running on the same CPU while the customer is in the process of migrating from a previous version to a new version. SVC is offered for a period not to exceed 12 months from the date of the SVC fee waiver. To take advantage of the SVC offering, customers must request it when ordering any new version of software that will be replacing a previous version of the same product on the same CPU. The customer's SVC request should include the product names and numbers of the old and new software involved, and the model and serial number of the CPU that both programs will be running on. The SVC offering is valid only while both the predecessor product and the replacement product are:

  • Both running on the same CPU
  • Licensed under the same IBM customer number
  • In the process of being migrated from the older product to the newer one by the customer

Clarifications to SVC under Aggregation and Changes to SVC when Operating under Sub-Capacity

  • In the case where a machine is part of a sysplex, if the customer is actively migrating from a program to a designated replacement program on the one machine, all machines upon which the program runs in the sysplex may also have the replacement program licensed. These machines will be deemed as actively migrating for SVC purposes.
  • Previously, eligibility was restricted to those licenses where the MSU utilization for the replacement program was equal to or exceeded that of the replacement program. That restriction has been removed. Licenses where the MSU utilization of the replacement program is less than the MSU utilization of the replaced program can now qualify.
  • When the replaced program and the designated replacement program are eligible for Sub-Capacity pricing, the new MSU valuation for the replacement program is now based on a combination of MSU values. The final replacement program charge is based on the lower of (1) the sum of MSU values for both programs and (2) a predetermined maximum value. The predetermined maximum values vary based on different configurations:
    • For versions of z/OS™, use the full machine MSU capacity.
    • For programs other than versions of z/OS:
      • Where z/OS.e is not running on the machine, use the z/OS MSU value
      • Where z/OS.e is running on the machine, use the sum of the z/OS MSU value and the MSU capacity of the engine(s) where z/OS.e is running

    When Full-Machine Capacity charges apply, charges for the replacement program are based on the MSU value at Full-Machine Capacity. For software programs in a sysplex where aggregation charges apply, the MSU value for each license is calculated as above per machine before totaling to calculate the aggregated MSU value. Standard aggregation rules apply.


The e-business logo, zSeries, and z/OS are trademarks of International Business Machines Corporation in the United States or other countries or both.
S/390 is a registered trademark of International Business Machines Corporation in the United States or other countries or both.
Other company, product, and service names may be trademarks or service marks of others.

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