① Explainer · Licensing concepts
z Systems New Application License Charges give a reduced z/OS Monthly License Charge on a logical partition dedicated to a qualifying new workload. The reduced rate is real, but it is conditional on that LPAR running nothing else. Here is the mechanism, the qualification rule, and a worked cost example.
A cheaper z/OS, on one condition.
zNALC, z Systems New Application License Charges, is an IBM Monthly License Charge metric that prices the z/OS operating system at a reduced rate on a logical partition dedicated to a qualifying new application. IBM created it to lower the barrier to putting new workload on the mainframe, and it replaced the older z/OS.e operating system and the original NALC metric. The reduced charge applies to z/OS on the qualifying LPAR only. The new application itself and any other middleware are licensed under their usual terms, so zNALC is a discount on the operating system layer for new workload, not a blanket discount.
The condition that defines zNALC is exclusivity. The qualifying LPAR must run only the new application and the programs that directly support it. Put general production work on the same partition and qualification breaks. That single rule shapes every decision about how you carve the partition, and it is where compliance risk lives at audit. This explainer pairs with our IBM audit defense, where zNALC qualification is a recurring point of scrutiny.
Where zNALC differs from a standard z/OS workload charge
| Dimension | Standard z/OS MLC | zNALC |
|---|---|---|
| z/OS rate | Full Monthly License Charge rate | Reduced rate on the qualifying LPAR |
| Workload allowed | Any z/OS workload | Qualifying new application and its support only |
| LPAR designation | None required | ZNAL name prefix or LICENSE=ZNALC at IPL |
| Billing modes | Full or sub-capacity | Full or sub-capacity |
| Main risk | Overpaying for an unmanaged peak | Mixing other work and losing qualification |
A reduced rate on a managed peak.
Suppose a new WebSphere based application is placed on a dedicated LPAR with a Rolling 4-Hour Average peak of 200 MSU. Under standard z/OS MLC that 200 MSU would carry the full z/OS rate. Under zNALC the same z/OS workload on the qualifying LPAR carries the reduced rate. To make the saving visible without quoting IBM pricing, the illustration below indexes the standard z/OS rate at 100 units per MSU band and applies an indicative 40 percent reduction for the zNALC rate. Your actual rate depends on the IBM exhibit in force.
The units are an index, not IBM pricing, and the reduction is indicative. The structural point holds: zNALC discounts the z/OS layer on the qualifying LPAR, and combined with sub-capacity peak management the discount applies to a managed peak rather than the full partition. The exclusivity rule is what you protect; one stray batch job on that LPAR can put the qualification, and the saving, at risk.
The qualifying partition runs the new application and its direct support only. Resist the temptation to park other work there. A single unrelated workload can void qualification for the whole LPAR.
One stray job can cost the whole discount.
Use the ZNAL name prefix or set LICENSE=ZNALC at IPL so SCRT reports the LPAR as zNALC. A correctly flagged partition is the difference between claiming the rate and defaulting to standard charges.
If SCRT cannot see it, you do not get it.
zNALC supports sub-capacity billing. Manage the qualifying LPAR's R4HA peak with the usual levers so the reduced rate applies to a shaped peak, not the full partition. The two savings compound.
A lower rate on a lower peak is the goal.
Keep evidence that the workload qualifies and that the LPAR is exclusive. zNALC qualification is a standard audit question, and clean documentation is what turns a query into a non event.
Qualification you cannot prove is qualification you can lose.
An IBM Monthly License Charge metric giving a reduced z/OS rate on an LPAR dedicated to a qualifying new application. It replaced z/OS.e and the original NALC. The discount applies to z/OS on that LPAR; the application and middleware license normally.
IBM defines a new workload, historically including Java applications under WebSphere and named packages such as SAP, Siebel, PeopleSoft and Domino. The hard rule is exclusivity: the LPAR runs only the qualifying application and its direct support.
By naming it with the ZNAL prefix, or by setting LICENSE=ZNALC at IPL on supported z/OS levels. The designation flows into SCRT, which calculates the reduced charge on the partition's R4HA.
Yes. zNALC works in full or sub-capacity mode. In sub-capacity the reduced rate applies to the LPAR's highest R4HA, so combining zNALC with peak management compounds the saving.
Related: licensing concepts hub · sub-capacity vs full capacity · IBM Z pricing history · IBM licensing hub · IBM audit defense
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