ServiceNow Licensing Options: Which Model is Right for Your Organization?

ServiceNow is a cloud-based integration platform that can help businesses standardized, streamline, and automated IT services and operations. Before deploying ServiceNow applications, it is important for organizations to have a better understanding of what types of ServiceNow licensing models best fit their needs to optimize ROI.

In this article, we will guide you through the different ServiceNow licensing models available and help you choose the right ServiceNow licensing options that align with your organization's needs.

What are the Different ServiceNow License Types?

ServiceNow has flexible licensing models catering to the unique needs of diverse businesses. Knowing the differences between the licensing models and what makes each unique is important in making an informed decision. So, choose the best ServiceNow licensing option depending on the services or applications used, the number of users involved, and the level of functionality required. Let's look at the different types of ServiceNow licenses.

• 1. Subscription-based Licensing

  The most common licensing model of ServiceNow is subscription-based. This model charges organizations a recurring fee, which is payable annually or semi-annually, depending on the number of users, applications integrated, and features implemented.

  This consumption-based licensing model charges the organization based on the actual consumption of ServiceNow products. This would be helpful for businesses that have highly variable usage patterns, such as fluctuating numbers of incidents and IT requests.

  For example, on deploying ServiceNow ITSM, organizations can opt only for a few licensing options for core ITSM modules, such as incident management, change management, problem management, and service catalog. Based on the utilization standards of these modules, organizations can choose subscription-based licensing models.

  Organizations can add licenses for additional features in ServiceNow, such as performance analytics, Virtual Agent (Chatbots), Orchestration, and Security Incident Response. Each module adds functionality to your ServiceNow environment but comes with an additional cost.

• 2. User-based or Role-based License Types

  Role-based licensing is another approach. This model allows businesses to better spend their licensing budget based on the type of user accessing the system. For example, an organization might buy more licenses for the IT service desk team and fewer for higher-level users like managers or executives.

  The most common types of ServiceNow licenses under the role-based subscription model are:

  • Requester licenses: The best thing about this license is it doesn't require an additional subscription costs. These licenses are designed for requesters to raise IT ticket requests.
  • Fulfiller licenses: A paid subscription is required. The fulfillers will have complete control over the service requests or incidents management. Users are allowed to respond to and resolve IT ticket issues.
  • Stakeholder licenses: The role would be assigned to business stakeholders who can view the records in the system. The user is allowed to either accept or reject the requests or incidents raised by a requester.
  • Unrestricted user licenses: This is a paid, non-role-based licensing model that allows users to utilize the ServiceNow applications without any restrictions.

• 3. Module-based ServiceNow Licensing Options

  If an organization needs any specific ServiceNow functionalities, modular licensing may be the best fit. ServiceNow provides specialized licenses for different functional areas, so you only pay for the modules that your business needs.

  Some of the key ServiceNow modules available for modular licensing include:

  • IT Service Management (ITSM): Seamlessly manage IT services, incidents, changes, and configurations, and problems.
  • IT Operations Management (ITOM): Manages IT infrastructures, networks, and other operational components.
  • IT Asset Management (ITAM): Licensing for IT asset management and features access.
  • Customer Service Management (CSM): Manages customer service delivery and operations across touchpoints.
  • Governance, Risk, and Compliance (GRC): Manages the activities done for governance, compliance, and risk mitigation.
  • HR Service Delivery (HRSD): Streamlines HR activities, such as employee onboarding/offboarding, case/issue management, and employee service requests processing.
  • Security Operations (SecOps): Automates Security incident response and vulnerability management.

  With this ServiceNow licensing type, organizations can start with one or two modules and then add more as the business requirement changes. This helps to grow the system along with the organization's objectives.

• 4. Per-Transaction Licensing Types

  ServiceNow also provides a per-transaction licensing model, which charges organizations based on the number of transactions they process through the platform. This is more suitable for organizations with fluctuating user numbers or those that do not need full-time user access to the platform. Some of the key transactions that could trigger charges include:

  • Service Requests: The number of service requests or incidents captured on the ServiceNow platform.
  • Change Requests: All the change requests or approvals that take place via the system.
  • Approvals or Notifications: Depending upon the number of automatic approvals or notifications generated by workflows.

  For example, in the case where an organization regularly receives a bundle of IT service requests, the pay-per-transaction model will cost less than buying a complete set of user licenses. This will save you money that can be invested in accessing other additional features.

• 5. Enterprise Licensing Models

  Enterprise-level ServiceNow licensing options are designed for big organizations, which need maximum flexibility and access to all ServiceNow instances. It provides a comprehensive package that gives complete access to all the modules of ServiceNow available to unlimited users. Usually, enterprise licenses are offered only under a customized agreement depending on the specific needs and usage volume of the organization. Here are some advantages of the enterprise ServiceNow licensing types.

  • Unlimited User Access: Enterprise licenses are typically provided with unlimited access to employees, which is most appropriate for big brands having large teams.
  • Complete Access to Applications: With the enterprise license types, you get access to all the ServiceNow applications, which include ITSM, ITOM, ITBM, ITAM, and more.
  • Flexible and Scalable: Users can easily scale up or down depending on the state of business, without limits on each user's data, particularly when the enterprise is scaling up or experiencing restructuring.

  While the enterprise model is comprehensive, it is significantly more expensive. However, it could help you achieve long-term financial commitments.

Talk to our expert to get a free quote on ServiceNow licensing costs!

Key Factors to Choose the Right ServiceNow Licensing Options

• Organization Size and Number of Users

  Yes. It’s one of the most significant factors that organizations must consider before they choose a ServiceNow license model. Smaller companies with relatively small IT team can go for module-based or role-based ServiceNow subscription types for eliminating budget constraints. But organizations with fluctuating user counts are recommended to implement enterprise-level subscription models.

• Determine the Application Scope

  Though ServiceNow offers a bundle of features, applications, and instances, select the specific modules that meet your organization’s needs. For instance, if you want to streamline HR services delivery or customer service operations, the modular licensing model will allow your allows organization to focus on important aspects while keeping cost under control. However, for enterprises with more extensive needs, an enterprise license type may be the best fit.

• ServiceNow Licensing Budget and Cost Concerns

  ServiceNow licensing implementation cost is another big challenge for organizations. Subscription-based models have fixed costs, which are relatively easy to estimate. However, estimating the costs of the user-based or per-transaction models requires more effort but is more flexible about usage patterns.

• Scalability and Flexibility

  Enterprise-level ServiceNow license types are highly scalable and flexible. If your business is expanding rapidly, it’s a good idea to find a licensing model that can scale with the growing needs of your business without restructuring the whole IT setup.

• Customization and Integration

  ServiceNow offers extensive customization or integration options with other enterprise systems. The license model that you choose should support such developments. For complex IT environments, ServiceNow's more advanced licenses, such as the enterprise license, would best support such needs.

Where are You on Your ServiceNow Journey?

The ServiceNow licensing options are designed to suit diverse organizational needs. First, evaluate the scale of your ServiceNow platform deployment, determine how many users will interact with the software, and identify the kinds of modules your organization will need. Finally, align your licensing model with the current and future business goals.

V-Soft Consulting is here to help you navigate your ServiceNow implementation and licensing journey. As an Elite Partner of ServiceNow consulting and implementation services, can help you check your licensing situation and help you potentially save money. Our ServiceNow experts will guide you on the different types of ServiceNow licenses and costs.

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