License Consumption Rules

IT Asset Management (Cloud)
Derived from license terms (as amended by maintenance contracts and purchase agreements), the License consumption rules part of the Use rights & rules tab determines how consumption of entitlements on this license is calculated.
Tip: This section only appears on license types that have one or more of the enclosed controls to display. See Restrictions below in this topic.


Four main factors affect this calculation, varying across license types:
  • Software installations revealed in imported software inventory always trigger consumption for device-based licenses. There are limited ways to modify this behavior, such as retiring the hardware asset on which the software is installed. For some device-related licenses (such as processor limited), the hardware configuration may prevent an installation consuming from (or being covered by) this license. But as a general rule, installation requires license coverage.
    Tip: For virtual machines, the ability to consume from a particular license may be limited by what is set as the Hosted in for the inventory device (see General Tab), compared with what is selected here for the Cloud service providers choice (see below). For example, if this license has only On-premises selected, then an inventory device marked as hosted in any cloud environment cannot consume from this license.
  • Individual allocations from this license to computers or users have either of two effects:
    • The default behavior is that, in competition for limited license entitlements, an allocation gives top priority to an installation (or usage) record. For example, if you had a single entitlement and two installations, one of which is backed by an allocation, then the allocated installation wins the entitlement, and the other installation is unlicensed. This is useful behavior when it is possible to inventory computers in the normal way.
      Note: For SaaS User licenses and Microsoft User Client Access Licenses (CALs), each allocation of a user by default consumes one entitlement. For Microsoft Device CALs, each allocation of a device by default consumes one entitlement.
    • You may choose to make all allocations (for a given license) always count as consumption, even for those computers that cannot be inventoried. For example, if a road warrior's notebook eludes you, you can allocate a license to that machine, and make allocations count for consumption. Since allocations may only be made and removed by manual effort, this has the downside risk that you forget to remove the allocation when necessary. (At the time of retiring a computer asset, any existing allocations are stripped off; but be aware that it is still possible to make a new allocation to a device for which the asset record is marked as retired, until such time as you clear this device out of inventory.) Also be aware of the need to manually set the Overridden Consumption on point-based licenses.
  • The simple ability to access an application (having adequate network permissions) is enough to count as consumption for some licenses, particularly those that are hard to measure (such as CALs, or licenses for virtualized applications streamed from an application server or delivered through a virtual desktop).
  • In other cases (sometimes after some firm negotiation with the publisher!), consumption of these 'difficult' licenses only occurs when there is evidence that the application has actually been used by someone (called usage in IT Asset Management).
The controls in this section of the accordion control these behaviors. They may appear in slightly different forms for different license types. For many licenses, these settings are configured for you by the product use rights libraries; but on other occasions, you may need to digest the legal terms of your license and set these manually as appropriate.
Separate controls apply to the "whether or not", "why", and "what" of license consumption, as listed below.
Important: For information about multi-product licenses and their handling in IT Asset Management, see Multi-Product License.


The Allocations consume license entitlements control is not available on the following license types:
  • CAL Legacy
  • Microsoft User CAL
  • Microsoft Device CAL
  • Oracle Application User
  • Oracle Legacy
  • Oracle Named User Plus
  • Oracle Processor.
The following license types show controls for handling application virtualization and desktop virtualization:
  • Appliance
  • Client Server
  • Device
  • Device (Core-Limited)
  • Device (Processor-Limited)
  • Evaluation
  • IBM Authorized User
  • Named User
  • Run-Time
  • User.
The Cloud service providers section is not displayed for the following license types:
  • CAL Legacy
  • IBM Authorized User
  • IBM Concurrent User
  • IBM Floating User
  • Microsoft Device CAL
  • Microsoft SCCM Client Device
  • Microsoft SCCM Client User
  • Microsoft User CAL
  • Named User
  • Oracle Application User
  • SAP Named User
  • SAP Package
  • Users.

Bundle consumption rules

This section appears exclusively for the IBM VPC license type, and alters the consumption behavior of these licenses. Choose one of the following options:
Control Details
Consume for each product on a device

Use this option when the license entitles you to run multiple primary products from a Cloud Pak bundle on the same device. Consumption is calculated separately for each primary product, based on the cores assigned to run it on the device (and then multiplied by the Product conversion ratio), with the total consumption for the license being the sum of the consumption values calculated for each primary product.

Because this option takes account of the number of products running on each device, the Consumption tab of the license properties starts each hierarchy from the licensed product. To allow this, the identifying column is renamed Product/device, with the row for the product given a pseudo-Device type of Product. The child rows for each product then identify where the product is running, typically identifying the virtual host, optionally some resource pools, and the actual VM – although of course, a product may run on a stand-alone physical server, needing fewer rows for identification.

Only primary products can consume in this mode. With this option selected, there is no way to make a supplementary product consume from the license. This is because it is normal in IBM VPC licenses for supplementary products to be 'no cost extras' that do not consume license entitlements, but are covered by the correct licensing of their primary product.

Each primary product may have its own independent Product conversion ratio, which converts the total number of VPCs running that product on a given host (if necessary, capped by the total capacity of the host, so that time-slicing across VMs does not result in over-consumption of the license) to the number of license entitlements consumed.

Consume once for each device
This option is for license agreements that allow multiple products to be installed on the same device, and covered by the one license. Typically such a license, instead of counting up products, scales according to the power of the device – that is, for virtual machines, the more cores that are assigned, the more license entitlements are required. For that reason, selecting this option exposes the next control, where you specify the licensing required for each VPC.
Tip: Keep in mind here that "VPC" is an umbrella term that means different things in different contexts:
  • Cores assigned to a virtual machine, if necessary capped by the capacity of the host
  • Threads (or vCPUs) for an instance hosted by a cloud service provider (where the device identifies the cloud service provider its Hosted in property)
  • Physical cores in the processor(s) of a stand-alone computer not used for virtualization, but running the software directly.
Because this option measures the power of the inventory device, and not the number of products running, the Consumption tab of the license properties starts each hierarchy from the logical device, most commonly the virtual host on which guest VMs are running.
VPC to license ratio

This control only appears if you select the option to Consume once for each device. Use the two spin controls to create a ratio between the number of virtual processor cores, and the number of license entitlements consumed by that number of VPCs. These ratios vary by product, so check license terms carefuly. For example, suppose that the license agreement for a particular product says that the "license" (meaning one license entitlement) allows you to run 2 VPCs, your correct setting is 2 : 1. The setting requires whole numbers, so an agreement that said "each VPC consumes 1/3 of a license" must be expressed as 3 : 1. If the license has been created automatically using the appropriate downloaded Product Use Rights Library (PURL) and SKU Library, this ratio is set by the libraries, and best practice is to leave the setting other than in exceptional circumstances (for example, by special agreement with IBM).

Consumption per device, user, or access

The following controls are available:

Control Details
This license does not have contracts with license consumption rules This label indicates that this license has no linked contract attached to it that has applicable license consumption rules. License consumption rules can be inherited from a contract, or specified in this section. This label appears when the contract attached to this license has no license consumption rules. See Contracts Tab.
Inherit application license consumption rules from contract
Indicates the name of the linked contract from which this license can inherit license consumption rules and rights. When you select this check box, you instruct IT Asset Management to dynamically inherit license use rights and rules from an automatically-selected linked contract. If a license is linked to multiple contracts, the license inherits use rights and rules from one of the linked contracts based on the following conditions:
  • If one of the linked contracts has a value Yes for the Evergreen field, its use rights and rules are inherited by the license.
  • If none of the linked contracts has a value Yes for the Evergreen field, the license inherits use rights and rules from the contract that has a greater value for the Expiry date field.
  • If none of the linked contracts has a value Yes for the Evergreen field, and all of the linked contracts have same value for the Expiry date field, the license inherits use rights and rules from the contract that appears first in database order (normally the contract record that was created first).
  • If all of the linked contracts have a value Yes for the Evergreen field, or all of the linked contracts have same expiry date, the license inherits use rights and rules from the contract that appears first in database order.
    Note: You cannot use other rights options when you select this check box.
Allocations consume license entitlements
  • Clear this check box for the default behavior. In this case, an allocation by itself does not consume license entitlements directly. Instead, it gives top priority to the target user or device to which the allocation was made, so that when an installation record appears in inventory, it is in the first group (the group of all allocations) to consume from the available entitlements. This is valuable when there may not be sufficient entitlements purchased for a license to cover all installations, and you wish to ensure that certain people/machines are covered by this license.
  • Set this check box to force all allocations on this license to count as consumption. This is valuable when there are devices (or users) not conveniently covered by your software inventory processes. You can use an allocation to ensure that both that the target user/device is licensed, and that its consumption is correctly recorded regardless of the fact that there is no corresponding inventory. Device- and user-based licenses, and CALs, typically consume one entitlement for each allocation. Points-based licenses default to zero points for each device, and you must manually set the Overridden consumption per device on the Consumption tab of the license properties.
    Important: An allocation is only reflected in consumption calculations from the next inventory import/calculation after both the setting of this check box and the existence of the allocation in the Consumption tab of the license properties.

This option is not available for Microsoft User CALs and Microsoft Device CALs as it is automatically selected for these license types.

Access granted to users, or usage, consumes license entitlements
  • For most licenses, the default setting (the check box is clear) is correct.
  • For licenses covering virtualized applications, set this check box to expose additional controls. (Here virtualized applications includes those streamed from an application server, or deployed from such a server for local installation, or delivered through a virtual desktop solution.) In short, select this check box to allow license consumption for App-V, Citrix Virtual Apps, and Citrix Virtual Desktops applications (the "whether or not" setting for consumption for virtualized applications).
    Tip: The choice between access or usage is made by the last of the newly-exposed controls, described below.
Consume one entitlement for each user or Consume one entitlement per device owned by each user This group of radio buttons determines, once consumption is triggered, exactly what quantity is consumed (the "what" of consumption).
  • One entitlement per user: some licenses (more typically for application virtualization) require a device-based calculations, but make the concession that all the devices 'owned' by a single user may be grouped together and counted as one. This sounds rather like user-based licensing, but meets the publishers' requirements for device-based licenses that can allow such grouping of devices.
    Tip: Some licenses (for example, in VDI environments) allow a right of "roaming use", where a single user may access the application from any number of end points (devices). For this right, select Consume one entitlement for each user.
  • One entitlement per device: other licenses require that every device is separately licensed, and further require that if a user can access the virtualized application on any device, then they are deemed to have access through each of their devices, all of which must be licensed. In this case, a device is 'owned' by a user when the user is either:
    • the Assigned user for a device
    • the Calculated user for a device (both of these are visible in the Ownership tab of the inventory device properties).

Restrictions: These radio buttons are only visible for the license types listed above the table.

Consume entitlements based on

When it is visible (that is, when Access granted to users, or usage, consumes license entitlements is checked), this control determines exactly what triggers consumption calculation (the "why" of consumption). Choose one of the following values:

  • Access — If the user's computer is listed for access in a record returned from inventory (in the access evidence or through the appropriate adapter for App-V, XenApp, or XenDesktop), consumption is triggered. For CALs, this control works as follows:
    • For Microsoft User CALs, a CAL is consumed for each of the users listed on the All Users page, unless any restrictions are applied. (See Restrictions Tab). If you restrict the scope of this license to a specific enterprise group, a CAL is consumed for each user of that enterprise group.
    • For Microsoft Device CALs, a CAL is consumed for each inventory device listed on the All Inventory page, unless any restrictions are applied. (See Restrictions Tab). If you restrict the scope of this license to a specific enterprise group, a CAL is consumed for each inventory device assigned to that enterprise group.
  • Usage within the time limit — Consumption is only triggered when there is a usage record (from the same adapters) within the time limit specified in the next control (which appears when you select this option). If there is no usage record within that period, there is no consumption calculated for that device/user. Specifically, even if the device/user is listed in inventory as having access, there is no consumption without the usage also being recorded. Similarly, prior usage outside the time limit counts for nothing. The time limit is always the specified period immediately prior to the most recent compliance calculation (a rolling window). For CALs, the collected access evidence control works as follows:
    • For Microsoft User CALs, a CAL is consumed for each accessing user (who accessed the server application that requires a CAL). The usage tracking must be enabled for the accessed application.
    • For Microsoft Device CALs, a CAL is consumed for each accessing device (through which the server application that requires a CAL, was accessed), only if the accessing device record matches one of the inventory device records. IT Asset Management uses the properties like IP address, device name, and domain to match the records. The usage tracking must be enabled for the accessed application.

As an example, suppose there is a usage record for Sam's computer on May 1, and the time limit is set to 90 days. When you examine status on July 29, Sam's computer is consuming from the license. Look again on August 1, and now it is not consuming, because the usage record is outside the rolling 90-day time window. This will be true even though Sam may be listed for access in the App-V data.

Usage time limit in days

This control appears when you choose to Consume entitlements based on Usage within the time limit.

Enter or spin up the number of days (immediately prior to the current compliance calculation) to examine for a record of usage. The default value (90 days) is a typical provision in such licenses, but check the details of your license agreement.

Note: For CALs, the usage record consumes a license only if the accessing device record (the device through which the server application was accessed) matches an inventory device record.
Clients accessing servers that consume this license will be exempted from CALs (No CALs required) Available only for the following license types: When selected, this option exempts users from consuming a CAL entitlement for accessing the server application linked to this license.
Note: For this exemption to work, the Product and Version must have matching values on both the consumed server license and the CAL.

Cloud service providers

The following check boxes are available. At least one of these check box must be selected; you may also select more than one of these check boxes, in which case all your selections apply simultaneously. For example, if you select both On-premises and Any cloud provider, any inventory device may consume from this license, regardless of where it is hosted, since you allowed both alternatives at once. Default values vary by license type, and are listed below.

When you select any of the following check boxes, the results are as follows:
Control Details
Inventory devices may consume from this license under either of the following circumstances:
  • They are physical devices (physical devices do not display any setting to show where they are hosted) — more precisely, their Inventory device type has any value except Virtual Machine; OR
  • They have both of the following settings in the General tab of their properties:
    • Inventory device type = Virtual Machine
    • Hosted in = On-premises.
Any cloud service provider
Inventory devices (which must be virtual machines) can consume from this license when their Hosted in is set to the name of any individual cloud service provider.
Tip: This applies even for cloud service providers who are added in future, after this setting has been chosen for this license.
Selected cloud service providers

This selection enables the list of all available cloud service providers registered in IT Asset Management (some names are provided by default, and others may be defined within your enterprise, as described in IT Asset Management Settings: Cloud Service Providers Tab). You may select as many of the providers as required. For points-based licenses, you can create a points rule for each cloud service provider, so that this one license may apply to multiple cloud service providers, with each having the appropriate points values applied (provided that all the other license properties are suitably aligned).

To consume from this license, inventory devices must have a matching cloud service provider selected as the Hosted in value. For example, if you selected Google and Microsoft Azure from this list, devices with either of these names as their Hosted in may consume from this license; but devices with Hosted in = Amazon Web Services may not.

Consumption settings for cloud service providers
This section appears only for the following license types, for each of which specialized controls may appear (described next):
  • Oracle Named User Plus (NUP)
  • Oracle Processor
  • Microsoft Server Core.
Note: If the following controls are set to zero, then the special consumption calculations for cloud instances are disabled, and consumption is calculated as if for on-premises devices. This may be useful if you are hosting devices in a private cloud for which Oracle licenses are not applicable (Oracle applies their cloud license terms only to "approved" cloud service providers). If you need to mix licensing in both a private cloud and an Oracle-approved cloud service provider, use separate licenses for each, and control the applicability to the different environments with the Selected cloud service providers controls.
The available controls for Oracle licenses are:
  • Number of vCPUs per server for NUP minimums (for Oracle NUP licenses): The coverage of vCPUs (on one server) provided by the minimum number of NUP license entitlements. For example, for Oracle Database Standard Edition 2, the minimum number of NUP entitlements required is 10, and these 10 entitlements authorize use of 8 vCPUs in an authorized cloud service provider. Do not enter the minimum NUP entitlements here (that value is on the Identification tab, in the Minimum users field). Instead, enter the number of vCPUs authorized by that minimum count of NUP entitlements, or in this example, 8.
    Note: The Number of vCPUs per server for NUP minimums control only applies when Minimum users type (on Identification tab) is set to 'Per Server'.
  • Number of vCPUs per socket (for Oracle NUP and Oracle Processor licenses): This setting is only relevant when, on the Identification tab of this license's properties, the Metric value is Number of sockets, which applies for Oracle Database Standard Edition 2 (and for any other metrics, this control is ignored). In the applicable case, it allows the Maximum sockets value (also on the Identification tab) to be interpreted correctly for instances hosted by an approved cloud service provider. It is the ratio defined in the Oracle license between vCPUs in the cloud and nominal, licensable 'sockets'. For example:
    • For Oracle Database Standard Edition 2, every 4 vCPUs (rounded up) are counted as one socket, equivalent to one Oracle Processor license entitlement (see, where the same product is also restricted to running on instances of no more than 16 vCPUs). In this case, set Number of vCPUs per socket to 4.
      Remember: If you have collected inventory from a cloud instance, its count of vCPUs is shown as the Threads property on the Hardware tab of its properties.
The available control for a Microsoft Server Core license is:
  • Azure Hybrid Benefit / license mobility: meaningful only for Microsoft SQL Server installations, and ignored for installations of any other product attached to this license. For SQL Server, the Azure Hybrid Benefit (or license mobility rules, for other approved cloud service providers) allows you to swap on-premises licenses authorizing appropriate editions of this product (where covered by active Software Assurance) for installations of SQL Server in the cloud. Check the terms of your license agreement for details.
Consumption settings for Microsoft Azure
This section appears only for the following license types:
  • Microsoft Server/Management Core.
The section initially contains a single check box: Azure Hybrid Benefit / license mobility. When this check box is selected (and to the extent that the license is covered by active Microsoft Software Assurance), sharing of license entitlements is permitted between a product installed both on-premises and on an instance hosted by an approved cloud service provider — although the precise nature of this sharing depends on all of:
  • Which cloud service provider is hosting the instance where the product is installed
  • Which product is licensed
  • What edition of that product is licensed.
For example:
  • For any cloud service provider apart from Microsoft Azure, license entitlements originally purchased for installations on-premises can be swapped to cover installations on hosted cloud instances instead. This is referred to as "license mobility", and is intended for customers who are migrating their data centers from in-house on-premises servers to hosted cloud servers.
  • For Microsoft Azure, product and edition are critically important:
    • Windows Server Standard edition allows existing on-premises license entitlements (with Software Assurance) to be moved to authorize the same software on an Azure instance instead
    • Windows Server Datacenter edition allows the same license entitlements (with Software Assurance) that were originally purchased for on-premises consumption to now simultaneously authorize product operation on-premises and on an Azure instance
    • For Microsoft SQL Server, you can trade existing on-premises license entitlements for discounted rates on Azure SQL Database and Azure SQL Managed Instance subscriptions. In general, a license entitlement covering one CPU core on-premises now switches to cover one core in the hosted instance; although if the license covers Microsoft SQL Server Enterprise edition, and the purchase was made under the General Purpose SKU, that single-core entitlement on-premises now authorizes four cores in your Azure instance.
The complexity of these license provisions mean that it is best practice to create (and update) licenses automatically by processing purchase records that reference recognized SKUs. In this case, the regularly-updated content libraries populate the appropriate values in the Use rights & rules tab. However, if you are creating or updating a license manually, you may make use of the following controls. These appear only after you have selected the Azure Hybrid Benefit / license mobility check box, and apply only to Microsoft Server/Management Core licenses:
  • Maximum cores for each entitlement — Enter or spin up the number of cores in Azure hosted instances that are permitted by each license entitlement. Validate this value in your Microsoft Server/Management Core license agreement.
  • Maximum VMs for each entitlement — Enter or spin up the maximum number of hosted instances (or virtual machines) authorized by each license entitlement, as defined in your license agreement. This figure is read in conjunction with the previous one. For example, if each license entitlement authorizes 16 cores and 2 cloud instances (or VMs), then each of those instances may support a maximum of 8 cores.
  • Entitlements may be used simultaneously in the cloud and on-premises — As discussed above, this right applies to Windows Server Datacenter edition. Even though the check box is visible (and selectable) on the license regardless of the linked product, the setting is only taken into account during the license reconciliation calculations when the licensed application is Microsoft Windows Server Datacenter edition. If any other product (or edition) is linked to the license, this setting is ignored.
    Tip: For Windows Server Datacenter edition, licensed with a Microsoft Server/Management Core license (such that this check box may affect license reconciliation), but the check box is left clear (not selected), then a pair of on-premises and cloud installations counts as two. It is much more cost effective, then, to keep this check box selected when permitted.
Note: Virtual machines can only consume from a Microsoft Server/Management Core license under either of two circumstances:
  • When the VMs are linked to a host server. This is the normal case, and applies in (almost) all environments, whether in your on-premises data center or in the cloud. However, virtual machines hosted in the cloud do not report a host unless they are hosted on a dedicated server. Examples of such exceptional environments include virtual machines running on either an AWS dedicated host, or an Azure dedicated host.
  • When the license is taking advantage of Microsoft Azure Hybrid Benefit (AHB), and additional data is gathered by the latest Azure connector. This connector provides sufficient additional information to allow VMs to consume from the license even though we do not receive inventory from the virtual host, and so provides another exception to the general rule of the first case.

Default cloud service providers by license type

Licenses created before the availability of the cloud service provider settings, and those not in the list below, receive the default setting On-premises and Any cloud service provider. There is no need to retrofit this value to existing records: in the absence of other input, it is provided automatically.

The following table lists the default settings for new licenses created for each of the following types. It does not matter whether the license is created manually, by processing purchases, or by using the Business Importer, these defaults are applied in the absence of other input.
Tip: The default selection is set by the license templates downloaded with the ARL and PURL, and so may be updated from time to time.
If you subsequently change the license type, the default settings are not updated, and you must make any adjustments manually.
License type(s) Default selection
Tip: Points rule provided.
  • On-premises
  • Selected cloud service providers
    • Amazon Web Services
    • Google
    • IBM SoftLayer
    • Microsoft Azure.
  • Oracle Application User
  • Oracle Legacy
  • Oracle Named User Plus
  • Oracle Processor.
  • On-premises
  • Selected cloud service providers
    • Amazon Web Services
    • Microsoft Azure.

All other license types

  • On-premises
  • Any cloud service provider.

IT Asset Management (Cloud)