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Here’s the proof? — What ‘proof of entitlement’ means to IBM Software

IBM, like most software publishers, are entitled to perform customer audits once per year. With that in mind, it’s important to have your documentation readily available. Store both the printed and online documents in secure locations and reconcile them regularly. Don’t be caught in a non-compliant position during an audit. Be proactive and perform routine self-audits.

The key to a successful self-audit is complete understanding of your entitlements—a challenging feat considering the numerous documents you receive with your IBM software. To help you make sense of these documents and to clarify what ‘proof of entitlement’ means to IBM, here’s our guide to what you need to know.

Proof of entitlement

The software licensing documents you receive with your IBM software contains valuable information about the use, management and transfer of the licensed programs. IBM will look to these documents as the necessary evidence which will demonstrate your rights to install and use IBM software— ‘proof of entitlement.' They can be grouped into private (offline) and public (online) sources and both are relevant to ensure your proof of entitlement is up to date.

Private proof of entitlement data

‘Private proof of entitlement’ represents any document or record that has been made available only to you, following the purchase of an IBM software license.

  1. International Product License Agreement (IPLA) – An agreement IBM uses to license software distributed worldwide. The IPLA, including the License Information (LI) documents, grants customers a non-exclusive license to use the IBM software. All software under IPLA has a warranty. IPLA applies to IBM software products such as Data Management Tools, Application Development Tools, Systems Management Tools and IBM software products for a host-based Linux environment, such as WebSphere Application Server for Linux on System z.

  2. International License Agreement for Non-Warranted Programs (ILAN) – This agreement is similar to IPLA, but is used for IBM licensed programs a customer has chosen without warranty.

  3. International License Agreement for Evaluation of Programs (ILAE) – This agreement provides a non-exclusive, non-transferable license to use a program only for internal evaluation, testing or demonstration purposes, on a trial or “try-and-buy” basis. The evaluation period begins on the date that the licensee agrees to the terms of the agreement and ends on the earliest of a) the end of the duration or b) the date specified by IBM in either the License Information or transaction document or the date the program automatically disables itself.

  4. International Agreement for Acquisition of Software Maintenance (IAASM) – The agreement that describes the terms and conditions under which software maintenance is provided. Based on the maintenance agreement, the customer will be provided defect correction information, program updates, and technical assistance.

  5. International Passport Advantage/ Passport Advantage Express Agreements (IPAA) – These are contracts between IBM and customers for a combined software license acquisition, software subscription and support, IBM appliances and IBM SaaS subscriptions. Under the Passport Advantage agreements, IBM provides the customer a way to obtain authorization to use, update and support selected programs at volume pricing. A customer can order a single platform or multiple platforms, one product or entire suites, for one location or a network of offices around the world. Passport Advantage addresses the needs of large enterprises that have multiple sites and provides better discounts for volume purchases over time. It also includes the obligations and rights that are agreed, impacting the purchased software and relating conditions, restrictions, exceptions, and requirements. Passport Advantage Express is designed for single-site, medium-sized enterprises and features a single price level. Renewals take place on a per transaction basis, instead of being synchronized to a single anniversary date.

  1. Enterprise Licensing Agreement (ELA) – A multi-year contract dividing spending into monthly, quarterly or yearly payments. Software is licensed by capacity on a month by month basis, and there are no upfront costs to acquire it. Cost of software is estimated over the ELA period by the customer and IBM jointly.

  2. IBM Customer Agreement (ICA) – An agreement under which IBM software products are licensed. The ICA defines the general terms and conditions, warranties, machine or service terms of a transaction by which the customer purchases machines, ICA program licenses, obtained program licenses, and acquired services (including, without limitation, customized development and support, business consulting, and maintenance services) from IBM.

  3. End User License Agreement (EULA) – An agreement between the software vendor and the end user explaining the terms governing the use of the software on the customer’s device. New users are presented with the EULA for acceptance upon install/download.

  4. Proof of Entitlement Certificate (PoE) – A document sent by IBM to all customers after purchasing software confirming the eligible products and authorized level of use. This is the official record on entitlement. It includes important order information such as customer number, site number and order number and is evidence of eligibility for any version or release updates under software subscriptions, warranty services, and future upgrade programs prices. A PoE is created for new customer orders or after purchasing additional entitlement.

  5. Ordering Document (OD) – A document that includes the end user’s details, the name of the agreement that governs the purchase, the products purchased, the quantity, the license metrics and level, the fees that were paid for the licenses and the terms and conditions for the purchase.

  6. Invoices – Evidence that a financial transaction took place.

Public proof of entitlement data Along with the ‘private proof of entitlement’ that only you receive, there is also ‘public proof of entitlement’ data that represents any entitlement details that are part of your agreement, but that is publicly displayed on IBM's website and is available to all IBM's clients.

  1. Licensed Information Document – Provides information and any additional terms specific to a program, which applies to certain software announced or released after May 1999. The License Information document defines any unique terms and conditions of a program.

  2. Announcement Letters – Online notifications about product releases, withdrawals, upgrades, part descriptions or changes to features or components.

  3. Passport Advantage Online – Online portal where customers can find the latest program information and an array of other valuable information such as migration history, order history and a summary report of purchased licenses.

Be prepared for an audit. Understand the details of these documents and stay on top of any changes to your usage. Don't expose your organization to huge financial risks.

This article was written in collaboration with licensing experts at The Software Consulting Group (SCG) and b.lay.

To discover how SCG can help your business be prepared for an IBM audit, contact Richard Liotta at 1-416-795-3667 or email him at:

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