Key Takeaways:

• ServiceNow uses a subscription-based licensing model with monthly or annual payments.
• It follows a role-based licensing structure, assigning licenses based on a user’s role within the organization.
• Choosing the right license type is crucial for cost efficiency and compliance.
• Different modules and applications within ServiceNow may have distinct licensing requirements.

Understanding ServiceNow Licensing

ServiceNow licensing follows a subscription-based model, where organizations pay a recurring monthly or annual fee based on the number and type of licenses required. The licensing framework is role-based, meaning users are assigned licenses according to their job functions and responsibilities. A subscription in ServiceNow allows a customer to upgrade from one family release to the next without having to go to the ServiceNow Store.

ServiceNow still has the option to offer a perpetual licensing option, but this is not very common anymore.

The cost of a license depends on the type of license and the features included.

ServiceNow License Types

Understanding the different types of ServiceNow licenses is essential for selecting the most cost-effective and compliant solution for your organization.

Role-Based License Types

ServiceNow works with a role-based licensing model. Licenses should be assigned based on a user’s role within an organization. The advantage of a role-based licensing model is that a company can manage costs and usage by only giving a user access to the functionality and features they need for their specific job role. User roles and licenses can be easily adapted and altered.

1. Requester: Free license type allowing employees or customers to submit support requests via self-service portals.
2. Fulfiller: Grants full access to perform administrative tasks, manage incidents, and provide IT support (This is the most expensive license, for example for ITIL access).
3. Approver (or Business Stakeholder): Allows users to review and approve requests without having full access to the system.

Additional License Categories

Once you understand the different roles, it is then important to understand the type of licenses you require. Do you want to license known users? Do you have multiple users that can share a license? Or do you want everyone to be able to access the Now Platform?

Use the list below to choose the right license type for your organization:

•  Named User Licenses: Assigned to specific users with dedicated access to the platform’s features.
• Concurrent User Licenses: Shared among multiple users, with access limited to a set number of simultaneous logins.
• Enterprise Licenses: Grants organizations access to an extensive set of tools and modules beyond ITSM, such as Customer Service Management (CSM), HR Service Delivery (HRSD), and Security Operations. Pricing is based on the number of named users.

Module-Specific Licensing

ServiceNow’s licensing is further divided based on its various modules, each catering to different business functions:

• IT Service Management (ITSM): Includes incident, problem, and change management functionalities
• Customer Service Management (CSM): Designed for organizations providing customer support and engagement
• Human Resources Service Delivery (HRSD): Enables automation of HR workflows
• IT Operations Management (ITOM): Helps organizations manage IT infrastructure and operations efficiently
• IT Business Management (ITBM): Helps align IT investments with Business Goals and FinOps
• IT Asset Management (ITAM): Focuses on software and hardware asset tracking and optimization

Organizations should carefully assess their module requirements to avoid unnecessary costs while ensuring they have the necessary functionalities to support their operations.

Key Challenges in ServiceNow Licensing

ServiceNow licensing can be complex due to:

• Frequent changes to licensing models and pricing structures.
• Over-licensing and underutilization, leading to wasted resources.
• Ensuring compliance with ServiceNow’s contractual terms and conditions.
• Custom applications that may require additional licensing considerations.

Optimizing ServiceNow Licensing

To maximize the value of your ServiceNow investment, organizations should adopt best practices for license optimization:

1. Review license usage & scope: Regularly audit your licenses to ensure you are not overpaying for unused or underutilized licenses.
2. Monitor license utilization: Track how users interact with the platform to adjust licensing based on actual usage patterns.
3. Understand your licensing agreement: Familiarize yourself with your contract terms, including what modules and roles are included, flexibility in adding/removing licenses, and associated costs.
4. Leverage automation: Use ServiceNow’s automation features to reduce manual work, potentially lowering licensing requirements.
5. Utilize ServiceNow’s built-in tools: ServiceNow offers tools for monitoring and optimizing license consumption. Regularly reviewing reports can help identify opportunities for cost savings.

ServiceNow Licensing Compliance & Management

To avoid compliance risks and unexpected licensing costs, organizations should:

• Conduct regular internal audits to verify licensing alignment with actual usage.
• Implement Role-Based Access Control (RBAC) to ensure that users only access functionalities relevant to their job roles.
• Establish license governance policies to track, manage, and allocate licenses effectively.

Licensing for Development & Testing Environments

Organizations using ServiceNow for development, testing, or staging should be aware of specific licensing requirements for these environments. ServiceNow typically provides provisions for non-production environments, but the terms can vary based on the agreement and subscription level.

Key Considerations:

• Non-production instances: Many ServiceNow agreements include non-production instances for development, testing, and staging purposes. However, the number of these instances and their permitted use may differ depending on the licensing tier.
• License allocation: Some organizations assume that development or test environments do not require separate licenses, but this is not always the case. Certain roles, such as fulfillers, may need licensing even in non-production environments.
• Usage restrictions: ServiceNow may impose restrictions on non-production environments, such as limiting the number of active users, integrations, or concurrent processes.
• Audit & compliance: Companies should maintain clear documentation on how their development and testing environments are used to ensure compliance with their ServiceNow licensing agreement. Overuse or misclassification of non-production environments can result in unexpected licensing costs.
• Cloud vs. on-prem deployment: Licensing rules can vary between cloud-hosted and on-premises ServiceNow deployments. Organizations with hybrid models should clarify how development and test environments are covered under their specific agreement.

By understanding and properly managing licensing for development and testing environments, organizations can avoid compliance risks and optimize costs while maintaining a robust testing framework for ServiceNow deployment.

ServiceNow & Microsoft Licensing: Integration and Considerations

Many enterprises use both ServiceNow and Microsoft solutions to manage IT services, cloud infrastructure, and business processes. Understanding how these platforms interact can help optimize licensing costs and enhance operational efficiency.

1. Integration with Microsoft 365 & Azure

• IT Service Management (ITSM) & Microsoft 365: ServiceNow integrates with Microsoft 365 applications, including Teams, Outlook, and SharePoint, to streamline IT support and workflow automation. Organizations should assess whether ServiceNow ITSM licensing overlaps with or complements Microsoft 365 capabilities. Such as Microsoft Endpoint Manager (Intune) or Microsoft Defender and built-in IT support features in M365. These tools serve different purposes but may offer overlapping functionality in areas like endpoint management, security and incident tracking.
• Azure Integration: ServiceNow provides cloud management and automation capabilities that integrate with Microsoft Azure. If an organization is using Microsoft’s Cloud Solution Provider (CSP) model or an Enterprise Agreement (EA) for Azure, they may have access to similar automation and governance features, reducing the need for certain ServiceNow modules.

2. Overlapping Licensing for IT Operations & Security

• Microsoft System Center vs. ServiceNow ITOM: Microsoft System Center (SCCM) and ServiceNow’s IT Operations Management (ITOM) both provide monitoring, configuration, and automation for IT assets. Organizations should evaluate whether they need both tools or if one solution covers their requirements.
• Microsoft Sentinel vs. ServiceNow Security Operations (SecOps): If a company is already using Microsoft Sentinel (SIEM) and Defender for Endpoint, they may not need all ServiceNow Security Operations (SecOps) modules, potentially reducing licensing costs.

3. Microsoft Licensing Data & ServiceNow SAM

• Software Asset Management (SAM) & Microsoft Licensing: ServiceNow Software Asset Management (SAM) helps organizations track software usage, including Microsoft licenses. However, Microsoft also offers its own licensing tools, such as Microsoft License Advisor and the Microsoft Admin Center. Organizations should determine whether ServiceNow SAM adds extra value or duplicates functionality already included in Microsoft licensing agreements.

4. Negotiating Licensing for Hybrid Environments

For organizations using both Microsoft licensing and ServiceNow, negotiating the right licensing mix is essential.

• If your company has an Enterprise Agreement (EA) with Microsoft, check if Microsoft products cover functionalities provided by ServiceNow modules.
• If you’re purchasing ServiceNow through a Microsoft partner, explore whether bundled licensing discounts are available.
• If you’re using Microsoft Power Automate, review whether it overlaps with ServiceNow’s workflow automation tools before purchasing additional licenses.