Impact of different license types on software reconciliation

  • Release version: Yokohama
  • Updated April 22, 2025
  • 4 minutes to read
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    Summary of Impact of different license types on software reconciliation

    This content explains how various software license types influence the Software Asset Management (SAM) reconciliation process in ServiceNow. Each license type carries specific entitlements and conditions affecting compliance, upgrade rights, maintenance benefits, and how SAM tracks and applies these licenses. Understanding these impacts helps customers accurately manage their software licenses, ensure compliance, and optimize licensing costs.

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    License Types and Their Impact

    • Perpetual: One-time purchase licenses allowing indefinite software use without ongoing payments. They do not include maintenance or upgrade rights by default; maintenance entitlements must be linked for such benefits.
    • Perpetual + Software Assurance (Microsoft): Combines perpetual licenses with Software Assurance to provide upgrades, license mobility, virtualization rights, and other benefits. Microsoft SAM automatically applies these benefits.
    • Subscription: Applies to subscription-based products (e.g., Jira, Microsoft 365, Adobe Creative Cloud) and some non-subscription products with subscription components (e.g., Windows Server). License compliance is driven by user subscriptions managed via subscription portals.
    • Perpetual + Maintenance (Non-Microsoft): Similar to Perpetual + Software Assurance but for publishers like Oracle and VMware, providing updates and support during the maintenance period. Maintenance benefits are automatically applied in SAM.
    • Upgrade and Step-up Licenses: Allow upgrading from lower to higher editions without buying full new licenses. Related licenses must be linked in the Software Entitlement form for accurate reconciliation.
    • Software Assurance and Maintenance Entitlements: These must be linked to base perpetual licenses to be recognized by SAM. Unlinked entitlements are not reconciled correctly.
    • Subscription Step-up: Upgrade option for subscription licenses to higher-tier editions within subscription terms, functioning similarly to step-up licenses for perpetual software.
    • Add-on (Microsoft): User Subscription Licenses (USLs) that allow customers with perpetual licenses and active SA to trial cloud features without full cloud transition. Must be linked to perpetual licenses.
    • From SA (Microsoft): Enables transition from perpetual on-premise Microsoft products with active SA to cloud-based Microsoft 365 subscriptions while preserving certain SA benefits. Requires linking to base perpetual licenses.

    Practical Implications for ServiceNow Customers

    • Correctly linking maintenance, Software Assurance, upgrade, and add-on entitlements to base perpetual licenses is essential for accurate SAM reconciliation and compliance reporting.
    • Understanding the distinctions between license types helps optimize license usage, take advantage of upgrade and maintenance benefits, and avoid compliance issues.
    • Subscription licenses require management through subscription portals and differ from perpetual licenses in how SAM tracks and reconciles them.
    • ServiceNow’s SAM automatically applies benefits for Software Assurance and maintenance where applicable, reducing manual reconciliation effort.

    Each license type has entitlements and conditions outlined on the entitlement form, and more importantly, these license types have a significant impact on the Software Asset Management (SAM) reconciliation process.

    Table 1. License types and their impact on software reconciliation
    License type Description Publisher applicability Impact on licensing or reconciliation in SAM
    Perpetual A one-time purchase license that enables indefinite use of the software without any ongoing or recurring payments. All This license grants indefinite use but doesn’t include maintenance rights, so benefits such as new version access, version upgrades, Bring your own license (BYOL) benefits, and technical support from the software publisher aren’t available. To receive maintenance/SA benefits, you must associate maintenance/SA entitlements with the Perpetual license.
    Perpetual + Software Assurance A perpetual license combined with Software Assurance (SA) from Microsoft offers a comprehensive Volume Licensing program with these benefits:
    • New version rights: Upgrade eligible Microsoft product licenses to the latest version at no additional cost.
    • License mobility: Deploy certain server applications on-premises or in the cloud without additional licenses.
    • Unlimited virtualization: License the physical host for products such as Windows Server Datacenter Edition, enabling an unlimited number of virtual machines.
    • Virtual layer licensing: License individual virtual machines, reducing overall licensing costs.
    		 Microsoft Software Asset Management automatically applies the Software Assurance benefits. For more information, see Software license maintenance.
    Subscription For subscription-based products like Jira, Microsoft 365, and Adobe Creative Cloud, as well as non-subscription products using subscription licenses, such as Windows and SQL Server. All (subscription products) License compliance is primarily driven by user subscriptions pulled from the subscription portal, such as Jira and Microsoft 365. It also applies to non-subscription products like Windows Server and SQL Server, which can receive Software Assurance benefits.
    Perpetual + Maintenance Perpetual + Maintenance is similar to Perpetual + Software Assurance, but it includes a maintenance agreement that provides access to software updates, patches, and sometimes support for a specified duration. This license type applies to non-Microsoft publishers such as Oracle and VMware. All Software Asset Management automatically applies the Software maintenance benefits. For more information, see Software license maintenance.
    Upgrade A licensing option that enables upgrading from a lower-tier edition to a higher-tier edition, such as Standard to Enterprise, without purchasing a new full license. All You can upgrade a lower edition of software, such as SQL Server Standard, to a higher edition, such as SQL Server Enterprise. Use the Upgraded Entitlements tab in the Software Entitlement form to link related versions of your software under active maintenance and your upgrades. For more information, see Software entitlement fields.
    Software Assurance Software assurance entitlement that provides Microsoft customers with software assurance benefits. However, it must be linked to a base perpetual license to activate the entitlements. Microsoft Software Asset Management doesn’t reconcile software assurance entitlements unless they’re linked to base perpetual licenses. Confirm that software assurance entitlements are related to base perpetual entitlements for correct reconciliation.
    Maintenance Maintenance entitlement that provides benefits to non-Microsoft customers. However, it must be linked to a base perpetual license to activate the entitlements. All Software Asset Management doesn’t reconcile only maintenance entitlement unless they’re linked to base perpetual licenses. Therefore, make sure to relate the maintenance entitlement to base perpetual entitlements for correct reconciliation.
    Step-up A licensing option that enables upgrading from a lower-tier edition of a product to a higher-tier edition, such as Standard to Enterprise,without needing to purchase a full new license. All If you're covered under Microsoft Software Assurance, you can upgrade a lower edition of software, such as SQL Server Standard, to a higher edition, like SQL Server Enterprise. Use the Upgraded Entitlements tab in the Software Entitlement form to link related versions of your software under active maintenance and your upgrades. For more information, see Software entitlement fields.
    Subscription Step-up Similar to a step-up license, this license type applies to subscription-based licenses, enabling upgrades to higher-tier editions within the subscription term. All (subscription products) Same as step-up licenses, but for subscription software only.
    Add on Add-on USL is a user subscription license that lets you try the features of a cloud-based Microsoft 365 product or service while actively using the perpetual on-premise version. If you have a perpetual license with active SA benefits, this license enables you to test the cloud version without fully transitioning to the cloud. Microsoft The add-on license must be associated with a perpetual Office legacy license with active Software Assurance. Therefore, you must link the two licenses for it to work. For more information, see Create Microsoft 365 From SA and Add-on entitlements in the Software Asset Workspace.
    From SA A Microsoft 365 From SA USL is a user subscription license that enables you to transition from a perpetual on-premise Microsoft software product to a corresponding cloud-based Microsoft 365 subscription, while maintaining certain SA benefits. This license is available if you have a perpetual license for on-premise Microsoft software products or services with active SA benefits. Microsoft The From SA license must be associated with a perpetual Office legacy license with active Software Assurance. Therefore, you must link the two licenses for it to work. For more information, see Create Microsoft 365 From SA and Add-on entitlements in the Software Asset Workspace.