Value Units (VUs)

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Value Units (VUs) are IBM’s unified metric for quantifying consumption-based revenue and licensing entitlement across both SaaS and traditional on-premise offerings [4]. While on-premise software historically relied on perpetual licenses, core counts, or user seats, IBM has transitioned many products to a subscription-oriented model that can still be deployed on-premises [4]. VUs allow sellers, finance, and clients to speak a common language around usage, sizing, and revenue impact, regardless of where the software runs [4].

A Value Unit represents a standard-sized block of product consumption (e.g., core-hours, transaction counts, or data processed) that maps directly to a dollar amount in a subscription contract [5].

The designated measure for the purpose of Value Unit calculation is execution-based MSUs (Million Service Units) which has been defined in detail below [5]:

From 1 to 3 MSUs, 1 VU per MSU [5].
From 4 to 45 MSUs, 3 VUs plus 0.45 VUs per MSU above 3 [5].
From 46 to 175 MSUs, 22 VUs plus 0.36 VUs per MSU above 45 [5].
From 176 to 315 MSUs, 69 VUs plus 0.27 VUs per MSU above 175 [5].