Software Licensing

The shift from perpetual to subscription licensing in network software has grown substantially in recent years. The subscription licensing model pushes vendors to develop the product constantly to stay at the top of the market despite TCO (total cost of ownership) remaining intact for consumers throughout the subscription term. Subscription licensing ensures that each SD-WAN license in an active device in the SD-WAN overlay includes newly developed cutting-edge features, at both the device level and the network level.


One of the main challenges is to design and introduce a solution that provides access to the product with minimum effort, enables rapid activations, delivers detailed visibility on consumption to help customers to track license usage, and monitors compliance with the least amount of operational friction. The best software licensing model avoids imposing substantial OPEX on the organization. An often unrecognized value that subscription licensing offers is predictability. Your licensing solution should provide thorough insight on consumption which is a key element in helping organizations plan for growth and realize expense reductions by eliminating unnecessary licenses. 


A best-in-class licensing solution should also be flexible enough to work within an organization’s existing procurement framework, and its established processes and procedures. That way as the vendor releases new offers designed to address an organization’s future needs, the product subscription management framework is already in place. The organization is not forced to adjust its operational systems and procedures for each new offer!

Enter Cisco Smart Licensing

Cisco SD-WAN is supported by flexible buying programs like Enterprise Agreements (EA) and Managed Service Level Agreements (MSLA), and a la carte. These buying programs ensure that customers can keep up with their infrastructure growth by eliminating the friction caused by a lack of required software licenses. To achieve flexibility and simplicity (The two primary goals of smart licensing), the solution monitors the level of compliance between the enabled licenses in a network, and available license entitlements in an asset pool procured through one of Cisco’s buying programs.

The main components of Cisco  Smart licensing for SD-WAN are as follows:

  • Entitlement pool
  • Subscription management
  • Smart Account policy
  • License assignment to the network
  • Reporting
  • Reconciliation and compliance

License entitlements and subscriptions are the outcomes of a procurement journey (like ordering a Cisco DNA subscription on Cisco Commerce Workspace (CCW), or entering an EA or MSLA contract). Once this journey ends, the licenses end up in a pool to be reconciled against consumption reports. Cisco Smart Licensing enables license and subscription consumption tracking. This allows customers to plan for expenses and renewal more efficiently, as this visibility removes the heavy lifting operational task of a manual reporting process which is prone to human error and also drives the traditional over-purchasing of software licenses.

Cisco Smart Software Management Portal (CSSM)

Think of the CSSM portal as a single pane of glass for Cisco Smart Licensing across all Cisco products. The CSSM portal graphically represents the license entitlement pool, subscription and reporting policy management, license consumption report reconciliation, and license compliance status based on reconciliation. Learn more about CSSM portal here. Now that Cisco has integrated the CSSM portal into vManage, Cisco has completed the last piece of the SD-WAN software licensing puzzle.

In a fully seamless process, automatic sync between CSSM and vManage enables vManage’s GUI to display a view of available assets from the CSSM license pool. This helps organizations to consume licenses based on the latest updates to the available licenses in the pool. And depending on the buying program, organizations can now use vManage to expand the network quickly: A device can be licensed despite an entitlement not having been purchased in advance! For example, an organization can leverage an EA contract that covers overconsumption via Cisco’s True Forward policy.

The sync provides visibility into available licenses, but it is the automatic reconciliation between the reported number of active licenses in the network, and available licenses on the CSSM, that drives the compliance status report. Based on the subscription policy (pre-paid or post-paid), the interval of the report can vary from monthly up to yearly.

It bears noting that Cisco’s implementation of Smart Licensing for SD-WAN is not designed to enforce compliance by limiting configuration options, or degrading device functions, or preventing defining boundaries for network expansion. That is not in the spirit of Cisco’s subscription-based software goals. Cisco’s main vehicle to encourage subscription software licensing compliance is reporting. The CSSM- and vManage-driven compliance reporting will provide organizations thorough insights and will one day include actual feature consumption metrics.


Cisco Smart Licensing is designed and optimized to deliver a comprehensive licensing solution that facilitates licensing fulfillment, monitoring, and compliance for all buying programs, license types, and devices through a very user-friendly, straightforward process.


Other Resources:

1. Smart licensing overview: Cisco Smart Licensing Website

2. SD-WAN release note: IOS-XE SD-WAN 17.5x Release Note


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Mike Ketabforoosh

Engineering Product Manager

Cisco SD-WAN