Broadcom Mainframe Portfolio License Agreements (PLA)
Introduction – Why PLAs Matter
Broadcom has been aggressively encouraging its mainframe software customers to move to Portfolio License Agreements (PLAs). These deals promise simplicity – one contract covering many CA mainframe tools – and more predictable costs.
However, while PLAs do streamline licensing, they also carry hidden risks if not structured carefully. Read our ultimate guide to Broadcom Mainframe Software Licensing (CA Technologies): Negotiation Strategies for IBM Z Environments.
This guide explains how Broadcom’s mainframe PLAs work, their pros and cons, and how to negotiate them effectively to maximize benefits without pitfalls.
What is a Broadcom Mainframe PLA?
A Portfolio License Agreement is an enterprise-wide licensing agreement that covers multiple CA mainframe software products under a single fixed fee.
Instead of purchasing separate licenses for each tool, you commit to a single subscription that spans a defined amount of mainframe capacity, measured in MSUs (Million Service Units).
For example, you might sign a 3- or 5-year PLA that allows usage of various CA tools across up to 5,000 MSUs of your mainframe environment. Within that limit, you can run any of the included products as needed without incurring additional costs or completing any paperwork.
How PLAs Work in Practice
Under a Broadcom mainframe PLA, key elements are defined upfront:
- Scope and Capacity: The PLA encompasses a defined mainframe capacity (for example, up to 5,000 MSUs) and a set of included CA software products (e.g., tools for database management, workload automation, and security). As long as your consumption stays within that capacity, the fixed fee covers all usage of the included products.
If you do exceed the baseline, it typically triggers additional fees or a contract adjustment. Some deals set a fixed overage rate for extra MSUs or require you to renegotiate to a higher threshold.
A PLA typically spans 3–5 years, with all included products co-terminating on the same end date. That simplifies management during the term with only one renewal to track, but it also means one high-stakes renewal when the PLA expires.
Advantages of a PLA
A Broadcom mainframe PLA can offer several benefits, especially if your mainframe usage is steady or growing:
- Predictable Costs & Simpler Management: A PLA fixes your software spend (no surprises as long as usage stays within the agreed limit) and consolidates many licenses into one contract. This makes budgeting easier and reduces the admin work of managing multiple separate licenses.
- Flexibility to Add Tools: It provides the freedom to deploy new CA tools without requiring separate purchase approvals. The PLA is like a software buffet – if a new project needs a tool, you likely already have it available under the agreement.
- Potential Cost Savings: Vendors often offer volume discounts for large, multi-product commitments. If you fully utilize the software in the bundle, the overall cost can end up lower than buying each product à la carte (since you avoid many incremental license purchases).
Disadvantages & Risks
Despite the upsides, PLAs come with some important downsides:
- High Cost Commitment: A PLA requires a substantial upfront investment, and if your mainframe usage later shrinks, you still pay the full fee. In other words, you’re locked into a significant spend even if your needs decline (unless you negotiated terms for a reduction).
- Shelfware Risk: It’s easy to pay for software you never use. If you include extra products “just in case,” those unused tools become wasted spend (shelfware).
- Vendor Lock-In: A PLA can deepen your dependence on Broadcom. You can’t drop an unwanted product mid-term without still paying for it, and at renewal, Broadcom knows you rely on their suite, giving them leverage to demand higher fees. This lock-in limits your flexibility to switch providers or reduce scope.
Read about mainframe licensing, Understanding MIPS/MSU-Based Licensing in Broadcom CA Mainframe Deals.
Negotiation Tactics
To get a fair deal, you’ll want to negotiate the PLA terms carefully. Broadcom’s default PLA contract will favor the vendor, so use these tactics to tilt things back in your favor:
- Set a realistic baseline: Base the MSU capacity on current usage. Avoid overestimating and paying for far more than you need.
- Negotiate a true-down: Ensure the contract lowers your fees if your usage drops significantly (so you’re not paying for capacity you no longer use).
- Exclude unused products: Only include software you know you’ll use, and negotiate the ability to drop or swap out any product that isn’t used. This prevents paying for shelfware.
- Add a growth buffer: Include a cushion (e.g., 10% above the baseline) to accommodate growth in usage without incurring an extra charge. Agree on pre-set terms or rates for any usage beyond that buffer to avoid surprises.
- Cap price escalations: Limit any annual fee increases to a modest percentage (e.g., a maximum of 3–5% per year) to prevent significant cost increases later.
- Control audit terms: Set boundaries on any vendor audits (e.g., require notice and limit scope to MSU usage verification). This prevents surprise compliance audits.
PLA vs Individual Contracts
How does a broad PLA compare to licensing each mainframe product individually? The table below highlights key differences:
| Aspect | Broadcom PLA (Bundled) | Individual Product Licenses |
|---|---|---|
| Cost predictability | Fixed annual fee (cost stays stable as usage grows) | Variable costs – you pay more as usage grows |
| Handling decline | Locked-in cost (no automatic reduction when usage drops) | Can reduce licenses/maintenance if usage falls (more flexibility) |
| Adding new software | Included upfront if covered by PLA (no extra purchase needed) | Requires separate purchase for each new product |
| Vendor lock-in | High – many tools tied together; hard to drop one | Lower – you can replace or drop individual products easily |
The best choice depends on your mainframe strategy. If your mainframe usage is stable or growing and you plan to use a broad range of CA tools, a PLA can offer cost certainty and convenience.
However, if your usage is shrinking or you rely on only a few products, you may prefer individual licensing to maintain flexibility and avoid paying for excess usage. Always evaluate whether the PLA’s all-in-one cost truly aligns with your actual needs.
Ensure flexibility, Broadcom Mainframe True-Down Rights – How to Reduce License Costs When Usage Declines.
Checklist – Must-Have PLA Clauses
Before signing a Broadcom mainframe PLA, ensure these key clauses are written into the contract:
- True-Down Adjustment: “If mainframe MSU usage declines by more than __% during the term, the annual fees shall be adjusted downward accordingly.” – This protects you if your capacity needs decrease.
- Growth Buffer: “The customer may increase mainframe usage by up to __% beyond the baseline with no extra charge.” – This provides some leeway for growth so that modest increases don’t result in instant penalties.
- Unused Product Exclusion: “Customer will not be charged for any software product that is not deployed or actively used.” – This is a safeguard against shelfware, ensuring you’re not billed for tools you never implement.
- Capped Price Escalation: “Annual fees shall not increase by more than __% per year during the agreement.” – Puts a limit on year-over-year price hikes and keeps costs predictable throughout the term.
FAQs
What exactly is a Broadcom mainframe PLA?
It’s an enterprise-wide license bundling multiple CA mainframe tools under one contract for a fixed fee (covering a set capacity).
Do PLAs actually save money overall?
They can in the right scenario – if you use most of the included software and your usage grows, a PLA’s fixed pricing can cost less than buying separate licenses. However, if you overcommit or include unnecessary tools, you may end up paying more than the cost of individual licensing.
What happens if my mainframe usage decreases during the term?
You’ll still pay the full fee. Broadcom won’t automatically reduce the price if you use fewer MSUs (unless you negotiated a true-down clause ahead of time).
Should I include all my CA products in one PLA?
Not by default. Only bundle the products you truly need. If you include everything “just in case,” you’ll likely pay for tools that never get used. It’s often wiser to add certain products later if they prove necessary.
5 Actionable PLA Negotiation Tips
To conclude, here are five quick tips for negotiating a Broadcom mainframe PLA to your advantage:
- Never overcommit on capacity. Base your MSU baseline on realistic current needs – avoid paying for imaginary future usage.
- Push for true-down protection. Make sure there’s a provision to reduce costs if your mainframe footprint significantly contracts.
- Build in a growth cushion. Negotiate some free headroom (e.g., 10% extra MSUs) to accommodate growth spurts without incurring additional fees.
- Exclude the “nice-to-haves.” Don’t pay for products you aren’t sure you’ll use; keep the scope focused to avoid shelfware.
- Set audit limits upfront. Define how and when Broadcom can check your usage so you won’t face aggressive audits or surprise charges.
With careful negotiation, a PLA can deliver predictable costs and simplicity while avoiding the common pitfalls. The key is to tailor the agreement to your specific needs and secure the right protections.
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