Scope and coverage of the CRA vs IPAA

IPAA is envisaged as a multi-Country structure. The standard CRA linked on the IBM website covers transactions in a single Country, and the terms refer to executing a “local participation agreement to participate directly under this contract” for entities based in other Countries. It is unclear how this relates to existing Additional Sites in Passport Advantage or to software purchased in one Country but deployed elsewhere in the Enterprise.

It is unclear whether the definition of "Enterprise" is consistent between the CRA and the IPAA. The IPAA includes any company with more than 50% common ownership with the Client Originating Company. The CRA defines the Enterprise as companies more than 50% owned by the contracting Originating Company. As a result, although both agreements state that Programs are for use "within Client's Enterprise only", the scope of the Enterprise definition may differ between the two agreements.

Companies often end up with multiple IPAA instances (each with multiple Sites). The Originating Sites for such agreements may not be the same legal entities which have agreed a CRA with IBM for other transactions.

IPAA includes a concept and definition of Site. This capitalized term is referenced within the CRA Attachments for Programs and Virtual Environment Licensing but not defined in the CRA. Additional Transaction Documents may be included in the overall contractual package for software that is part of the Passport Advantage Program where a Site is defined. Customers are advised to request a complete set of all applicable Transaction Documents from IBM before placing the first new order for products under the Passport Advantage Program after 1 February 2027.

Discounts and Pricing Bands

The CRA removes the Volume Pricing terms previously included in the IPAA. While the new terms continue to reference the Passport Advantage (PA) Program and PA may continue to provide RSVP Level discounts, IBM has not set out which additional Transaction Documents govern Program purchases made through PA. This leaves important questions unanswered, including whether RSVP Levels remain contractual and how IBM will apply the concept of Sites under the new framework.

IBM has also not yet explained how it will migrate existing clients to the new terms. This creates uncertainty for organizations with Additional Sites that fall outside the scope of the CRA covering the Originating Site. It also remains unclear whether the new terms apply to Additional Site orders only after the Originating Site has actively migrated to the CRA.

For clients with complex IBM estates, these are significant issues; changes to pricing bands, Sites and the contractual status of volume discounts could directly affect future purchasing, renewal costs and the commercial value of existing IBM agreements.

S&S Renewals

CRA (in the Product Attachment for Programs) explains that if S&S is not renewed, “Client may still use the Program at the level in use when coverage lapsed,” which is more restrictive than the IPAA, which says clients will lose access to downloads and media. It suggests that clients should not upgrade any instances after expiry of the S&S, even to levels of software which were generally available before expiry and therefore already paid for by the client as part of the S&S charges (in effect, this could be interpreted as a “use it or lose it” restriction on previous perpetual rights).  This may also restrict clients from making new deployments unless that version of the Program was already in use before the S&S expiry. We recommend that clients clarify with IBM that “level in use” should be considered as the right to use any GA release media downloaded prior to the coverage lapsing up to the quantity of the expiring entitlements:

1. If a customer has the software deployed and the latest version released at the time of S&S lapse, there is no significant impact. They may not be able to downgrade.

2. If a customer has the software deployed and is not on the latest version released at the time of S&S lapse, current perpetual rights are curtailed. Instead of being entitled to the version available at the time of S&S lapse, the customer will be limited to the version deployed at that time.

3. If a customer has licensed a Bundled Product, such as a Cloud Pak, the curtailment is more significant. Bundled products currently allow a customer to pick and choose which products to deploy and then apply a ratio to determine license consumption. With the new agreement, their deployment rights will be fixed to the products and versions deployed, effectively terminating their rights to other bundled products which have not been deployed. For example, Cloud Pak for Integration includes MQ, MQ Advanced, and App Connect (among others). If a customer had only MQ V9.4 deployed at the time of S&S lapse, they would not be able to deploy any future version of MQ Advanced or App Connect.

4. For customers with perpetual licenses that have no deployed software, this clause effectively terminates perpetual use rights. With no version deployed, there is no “level” at which the customer may continue using the software.

5. Clients should validate that these terms only relate to transactions from the effective date and that the “level in use when coverage lapsed” term will not be retrospectively applied to any S&S rights acquired previously under the IPAA.

CRA Termination Rights

The International Passport Advantage Agreement operated independently of your other agreements with IBM for hardware and services. Clients had the right to terminate the agreement without cause. The agreement became naturally dormant 24 months after the expiry of the last S&S coverage. The CRA does not include a similar termination option, so all continuing use of perpetual licenses will remain governed by the CRA.

The Livingstone perspective

Given the announced changes, this is a sensible time to take a fresh look at your IBM estate.

At Livingstone, we believe you should view changes to software licensing through a commercial and strategic lens, not simply as a compliance exercise.

Our IBM licensing experts can help organizations navigate the transition by combining contract interpretation, entitlement analysis, technical discovery, and commercial negotiation.

We can support organizations with:

• IBM license position assessments - establishing what you own, what you are entitled to use, and how that compares with your current deployment.

• Contract and entitlement reviews - analyzing Passport Advantage and associated documentation alongside the emerging contractual framework to identify rights, obligations, risks, and opportunities.

• IBM compliance and optimization - identifying potential exposure while also uncovering unused, duplicated, or unnecessary licenses and support.

• Cloud and virtualization licensing - assessing the implications of moving IBM workloads across on-premises, virtualized, and cloud environments, including sub-capacity considerations. IBM itself continues to reference the CRA and associated licensing requirements in its current sub-capacity guidance.

• Renewal and negotiation support - helping organizations enter IBM negotiations with a defensible understanding of their requirements, rather than accepting the status quo.

• Strategic IBM advisory - supporting technology and procurement teams in deciding whether to renew, restructure, consolidate, migrate, or renegotiate their IBM estate. 

Turning change into leverage

IBM's licensing evolution shouldn't simply result in a new set of documents sitting in the contract repository.

For organizations with significant IBM estates, it is an opportunity to ask a much more valuable question:

“Are we getting the maximum business value from the IBM licenses we already have, and are we negotiating from a position of knowledge?”

Understanding the transition from Passport Advantage is the starting point. Your entitlement position, deployment reality, and future requirements are where the real commercial advantage lies.

Livingstone helps organizations turn complex software licensing into informed commercial decisions. Find out more about our services here