ISV stands for Independent Software Vendor and from a "tools" perspective is often defined as vendors independent of IBM, i.e. CA, Compuware, ASG, BMC, etc.
There are three ways to reduce your ISV costs:
1. Negotiate from a position of power
2. Replace the ISV
3. Consolidate ISVs
The Smith Group joins with Information Systems Asset Management (ISAM) to arm you with the information you need to take control of the ISV negotiating process. And, we will even handle the entire negotiation for you.
ISAM was founded in 1996 to help data centers apply world-class software asset management practices to reduce software costs.
Our consultative approach helps software buyers become better negotiators. Often, our clients are already doing a good job with the information they have. But with the additional information and expert advice we provide, they can do a better job getting to the lowest possible cost structure for their data center. ISAM helps companies negotiate from a position of strength based on what they want, not what the vendor wants to give them.
ISAM’s proprietary GreenBook Database contains more than 100 million software cost, product usage and categorization data points from over 800 software vendors across 1,000 data centers worldwide. Actual software costs paid by data centers like yours are the backbone for numerous applications we use to guide your team to best-in-class software pricing. The GreenBook Database is a behind the scenes tool that is not available to the public. It’s only available from ISAM.
In the early 2000s IBM realized that the high cost of ISV software was impacting the Total Cost of Ownership of the System z platform. IBM undertook an aggressive strategy to match or increase the quality of IBM's software tools vs. the ISVs. And at the same time, significantly reduce the price of the IBM tools vs. the ISVs.
Start with the list price of the tool sets. IBM's software's list price is oftentimes 25 to 50% lower than the ISVs. Add that to IBM's willingness to apply significant discounts for their replacement products and significant reductions in a customer's annual software tools cost can be achieved.
As IBM's mainframe customers begin to modernize the possibility for capacity growth increases. By replacing the ISV tools with IBM's, not only does a customer's annual maintenance cost decrease but the software cost due to that increased capacity will be lower and more in line with the value that the tools deliver.
The Smith Group specializes in the replacement of ISV software with IBM tools assuring IBM's customers the highest possible ROI on that transition.
Most organizations negotiate with their ISVs independently. The Smith Group will review your entire ISV stack and identify opportunities to "offer" expanded footprints to well positioned ISVs in exchange for reductions in their annual cost. This kills two birds with one stone; i.e., a reduction in both ISV costs. The Smith Group has, over time, come to understand what competing product replaces every ISV's product, allowing us to know which vendor has the best strategic position to enable you to maximize your ISV cost reduction strategy.
HCL - HCL has taken over the R&D and support for certain IBM systems software products
and for a subset of those, they have been allowed to offer their own branded own branded
version of the products. These products are offered on a term license only with no large
up front license fee, allows them to match the annual maintenance cost of the products
they replace without an extended break even period. In addition, they offer their own
services for the conversion.
Modern Systems and Syncsort - Both of these software vendors have a specialization in
replacing IDMS. Syncsort will migrate in automated fashion to DB2 on z/OS while Modern
Systems can migrate IDMS to DB2 z/OS as well as any distributed platform. Both have
been doing these migrations for many years and boast many succesful customer
VirtualZ - VirtualZ strives to dramatically reduce your mainframe software license costs on-
premises or in a mainframe cloud saving 50% or more on software license fees. Their on-
premise solution allows a multi CPU customer to install certain batch-oriented ISV
software on the customers smallest CPU while directing the workload to run any other or
all other CPUs. Those batch oriented ISVs can also be run in the cloud and redirected to
your on premise mainframe. Batch products from IBM, ASG, Compuware, BMC, Rocket
and Microfocus will qualify. A sample list of ISV replace candidates for VirtualZ are:
CA - CA Cleanup, CA Easytrieve® Report Generator, CA Librarian®, CA
MICS® Resource, Management, CA Optimizer®, CA Optimizer®/II, CA Panvalet®
Compuware - File-AID
Microfocus - ChangeMan
SAS - 9.4 m5
IBM, in certain situations, allows customers to convert their Monthly License Charge (MLC) licenses to a perpetual licence called Value Until Edition (VUE). The MLC charge includes both the product License fee and the Subscription & Support (S&S) fee. The amount can fluctuate, up and down, with the utilization of the license on a monthly basis. MLC is considered the most expensive cost of the Total Cost of Ownership (TCO) of the mainframe. VUE is a traditional Perpetual license requiring an up front licensing fee with S&S fees annually (the first years S&S fee is billed separately and in advance).
Because of the larger, up front, license fee, the cost reduction that VUE offers compared to MLC over the first 5-year period typically runs about 10%. Every year after 5 years the savings for VUE vs. MLC balloon to approximately 50% per year.
This option is for companies who believe they will be on their mainframe for 5+ years and if your mainframe is strategic, VUE should be seriously considered.
For those that are looking to simplify and foresee growth without reduced MSU usage, Tailored Fit could be a good fit. By establishing a baseline determined by a period of previous MSU consumption and committing to that baseline for multiple years in the future, your pricing metric will switch from the rolling four-hour average (R4HA) to a total MSU consumed model. This conversion will require significantly less analysis to understand and manage. In addition, every MSU above the baseline will be discounted by 50%.
The drawback is that IBM is committed to not lowering the baseline over time, so a company removing workload from their mainframe may want to reconsider this stragy.
VirtualZ - Besides ISV software, VirtualZ can dramatically reduce the cost of IBM's MLC
compilers such as COBOL, PL1, C++, REXX, etc. by running on a customer's smallest CPU or
in the cloud.
VirtualZ strives to dramatically reduce your mainframe software license costs on-
premises or in a mainframe cloud saving 50% or more on software license fees. Their on-
premise solution allows a multi-CPU customer to install IBM's compiler
software on their smallest CPU while directing the workload to run any other or
all of their other CPUs or in the cloud.
Elevate ZPSaver from Precisely - Offloading expensive processing to zIIP engines provides
a significant opportunity to reduce costs and free up mainframe capacity with very little
effort, and that's where Elevate ZPSaver comes in.
Elevate ZPSaver offloads Copy, SMS Compression and Sort processing to zIIP engines,
effectively reducing the workload on your mainframe’s CPU. Using Elevate ZPSaver
helps to save money, offers significantly better performance and frees up your mainframe's
CPU for other important tasks.
IBM and IBM Business Partners tout the benefits of new mainframe and storage hardware. While there are improvements delivered by each new generation of
hardware, the major benefit of a new mainframe CPU is what is called the "Software
Dividend". This means that each new generation of mainframe brings with it a lower MLC
cost. IBM charges a hefty premium in terms of your MLC cost for staying on old hardware.
If you are still on an older mainframe, you should strongly consider upgrading to an N-1
generation of System z (today that would be a z14 or even a z13). Mainframes, like luxury
cars, depreciate significantly once they roll off the showroom floor. The transition to a
newly used CPU is routine and risk free but the reduction in your biggest platform cost,
MLC, can be major. Tiger Financial and The Smith Group have partnered together to lower
the Total Cost of Ownership (TCO) of your mainframe hardware requirements.
IBM's Cloud Tape Connector (CTC) for z/OS - IBM® Cloud Tape Connector for z/OS® allows you to easily copy and move mainframe data to private, hybrid or public Cloud storage, offering improved security, flexibility and economics for archive or for backup and recovery. IBM Cloud Tape Connector for z/OS processes and moves your data without the need for additional hardware gateway devices. It leverages zIIP processors to minimize CPU cost of data movement.
The latest version features new additional security options with Life Cycle Encryption and
provides “deviceless” Virtual Tape Emulation for a completely software-defined storage lifecycle.
Reduced overhead. Requires no complicated gateway hardware devices, or virtual or local tape hardware to purchase, configure or maintain. It connects directly with your public or private Cloud storage environments.
Secure data transmission. New Life Cycle Encryption optionally ensures that only encrypted data is ever transferred to the cloud, and that the encryption keys are only managed on the mainframe.
Extensible infrastructure. Use the same Cloud storage infrastructure for both mainframe
and open systems data.
Optimized data handling. Tailor data caching and movement for workload optimization.
Model9 - Model9 is comparable to IBM's Cloud Tape Connector (see above) but on steroids, with the ability to archive to low cost distributed storage as well as the cloud. In addition, Model9 can eliminate tape management software such as IBM's HSM and RMM as well as CA's CA1.
Virtual Tape Libraries (VTLs) were a modernization and cost reduction replacement for physical tape in the 1990s. The next evolution in that modernization and cost reduction strategy is archiving to the cloud or low cost distributed storage.
Managed Services. Our Mainframe Managed Services provides a complete and holistic service offering for your mainframe environment. This broad solution includes the more traditional roles such as DBA, Performance/Capacity Management, Technical Project Management, Application performance, Batch/Online performance improvements, High Availability, Disaster Recovery, etc.
Staff Augmentation & Maintenace Support. One of the challenges facing many IT organizations today is lack of internal resources. Obtaining skilled IT personnel is becoming harder but remains a necessity for supporting our ever changing business environment.
Extended System Programming Support. We provide toll-free technical phone support for problem determination, documentation of technical problems and problem resolution. ESPS covers all IBM operating system and subsystem software as well as all ISV operating system related software.
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