Subscription licensing grants the right to use software, or to access a hosted service, for a defined period, after which the right ends unless renewed. Microsoft’s Product Terms define an SL as a “subscription License that allows access to software or a hosted service for a defined period of time,” and state that the customer “has no right to use an Online Service after the SL for that Online Service ends.”[1] Consumption licensing meters use instead of fixing a quantity in advance: the customer buys or commits to a balance of credits, tokens or other units, and each use draws the balance down at a published rate.
The two models are commercial wrappers rather than units of measure. A subscription can be counted per user, per core or per capacity unit, and a consumption balance is converted into use through vendor rate cards. This article explains the general model and compares how named vendors define terms, credits and tokens, using rows in the LICENSEWARE Wiki catalog.
History
The catalog’s dated documents show vendors moving on-premises and perpetual products onto terms, and adding consumption units alongside user subscriptions. Broadcom’s 2026 Specific Program Documentation describes VMware Cloud Foundation, vSphere Foundation and standalone vSphere as “subscription software licensed on a per Core license metric.”[2] Atlassian closed new Data Center subscriptions to new customers on 30 March 2026 and set end of life for impacted Data Center products on 28 March 2029, when subscriptions expire and products become read-only.[3] Autodesk replaced Cloud Credits with Flex tokens as of 29 March 2022.[4]
Agreements changed too. Microsoft states that traditional volume licensing agreements such as the Enterprise Agreement “typically expire in three years,” while the Microsoft Customer Agreement, built for cloud services, “never expires” and has no purchase minimums.[5]
Scope and definitions
Four arrangements fall under this heading:
- Term licenses for installed software. The software runs on the customer’s hardware, but the right to use it is time-limited. Adobe states that its Term License Products are Named User offerings unless indicated as Feature Restricted Licensing.[6]
- SaaS per-user subscriptions. The vendor hosts the service and the customer buys a quantity of user subscriptions for the term. Salesforce’s Main Services Agreement bases fees on “Services subscriptions purchased and not actual usage.”[7]
- Capacity subscriptions. The subscription is measured in units that stand for resources. ServiceNow uses Subscription Units, which “may cover a different number of resources, depending on the resource CI category.”[8]
- Consumption balances. Credits or tokens are bought or committed in advance and consumed by use, such as Oracle Universal Credits, Autodesk Flex Tokens and Salesforce Flex Credits.[9][4][10]
How it works
Subscription terms
A subscription contract fixes the quantity, the term and the renewal rules. Salesforce states that purchased quantities “cannot be decreased during the relevant subscription term,” and added subscriptions are prorated and end with the underlying subscriptions.[7] Adobe’s Value Incentive Plan lets members add licenses in the Admin Console and order them within a grace period of 14 days (seven days through VIP Marketplace), and VIP Marketplace annual licenses renew automatically on the Anniversary Date unless changed at least 3 days before.[11] Rights attached to a subscription end with it: Microsoft states that additional use rights granted by Software Assurance end when SA coverage expires unless the benefit description says otherwise.[12]
Monthly cloud billing may use the peak of the period. Atlassian bills monthly cloud subscriptions on “the maximum amount of users you have throughout your billing period,” and does not credit mid-cycle removals.[13]
Capacity units
ServiceNow’s Subscription Management distinguishes Per-User subscriptions, which are manually allocated to Fulfiller, Business Stakeholder and Creator users, from Capacity subscriptions, whose usage “is automatically calculated,” and from Unrestricted User subscriptions, an “instance-wide measure of all active users.”[14] For Hardware Asset Management, ServiceNow publishes the ratio of assets to one Subscription Unit by category, for example 4 end user computers, 1 server, 5 network devices or 15 monitors per unit.[8]
Prepaid and committed credits
Oracle’s Universal Credits service description offers two billing models, Annual Universal Credit and Pay as You Go. Under Annual Universal Credit the customer commits an amount to be applied to eligible Oracle IaaS and PaaS services at rate-card prices; each annual amount “must be used within its applicable yearly Credit Period” and unused prepaid amounts “are non-refundable and are forfeited.” If the customer does not replenish at the end of the Services Period, Oracle converts the account to Pay as You Go.[9]
Autodesk Flex sells prepaid Token Packs. Tokens are consumed at the Token Rate on the Flex Rate Sheet; for per-day rates the day is “the contiguous twenty-four (24)-hour period that begins when an Authorized User first launches the Flex Offering.”[4] Tokens expire twelve months after the Token Pack is bought, and individual tokens and partial packs are not sold.[4] When no tokens remain, users may not access any Flex Offering, “including those products that consume zero Tokens.”[4] Autodesk’s separate Token Flex program, sold through an Enterprise Business Agreement, lets Capacity Offerings continue at a zero token balance, with the excess paid under the agreement.[15]
Salesforce describes Flex Credits as “a single, flexible unit of payment you can spend across Salesforce consumption services.”[16] The rate card converts each usage type into credits by a multiplier, for example 20 credits for an Agentforce Standard Action, and credits must be used before the Order End Date with no rollover.[10] Under pay-as-you-go all usage is charged at list price; under pre-commit and pre-purchase, overages are charged at the contracted rate.[17]
Citrix Platform Flex deducts Flex Credits monthly by unique users according to Personas, and a configured Persona consumes credits “even if it is never actively used”; remaining credits are forfeited at the end of the subscription term.[18][19] ServiceNow’s Workflow Data Fabric subscriptions include tokens spent per capability, with API_ACCESS shown as expending 8 tokens,[20] and Atlassian’s Rovo Dev credits include 2,000 per developer per month on the Standard plan.[21]
Enterprise commitments and true-forward
Large subscription agreements often allow growth above the purchased entitlement and reconcile later. Cisco’s Enterprise Agreement 3.0 lets a customer consume up to 115% of its initial entitlement of an eligible Full Commit Suite after the first six months “without incurring any additional fees,” charging only use above that threshold at the next True Forward.[22] Salesforce’s Agentic Enterprise License Agreement goes further: a “fixed-price, fixed-term agreement with unlimited access to Salesforce consumption services, no overages, and no usage-based billing.”[17]
Term and perpetual conversion
Vendors moving customers from perpetual or on-premises licenses to subscriptions publish conversion rules. Atlassian’s migration incentives give qualified Data Center customers a step-up credit “equal to the pro-rated value of any unused Data Center subscriptions” and extend Data Center subscriptions “for up to 1 year at a 100% discount” to run in parallel with cloud.[23] Under Citrix’s Transition and Trade-Up, on-premises licenses subject to the transaction are rescinded and replaced with term-based on-premises licenses, and Universal Subscription users may use on-premises term licenses and cloud subscriptions at the same time.[24] Oracle’s BYOL to PaaS lets owned on-premises licenses be applied to BYOL cloud services; the licenses are then “deemed deployed and in use,” with a transition period of up to 100 days.[25]
Vendor comparison
Subscription and capacity metrics:
| Vendor | Metric (vendor name) | Definition summary | Floor / term rule | Effective |
|---|---|---|---|---|
| Microsoft | User SL | Per-user subscription license for an Online Service[1] | 90-day reassignment; 300-seat cap on Business plans | 2026-08-10 |
| Salesforce | User | Authorized individual with a purchased subscription[7] | Quantities cannot decrease in term | 2026-06-01 |
| Atlassian | User | Account with permission to log in[13] | Maximum-quantity monthly billing | 2026-08-17 |
| ServiceNow | Subscription Unit | Units covering resources by CI or asset category[8] | Ratios by contract or HAM table | 2026-03-12 |
| Broadcom | per Core | Subscription per core[2] | 16 cores per processor | 2026-06-19 |
Consumption units:
| Vendor | Metric (vendor name) | Definition summary | Expiry / floor | Effective |
|---|---|---|---|---|
| Autodesk | Flex Token | Unit applied to Flex Offerings at rate-sheet rates[4] | Expires 12 months from purchase | 2026-08-28 |
| Autodesk | Token Flex | Token Flex under an Enterprise Business Agreement[15] | Excess paid per EBA | 2026-04-14 |
| Salesforce | Flex Credits | Credits consumed by usage-type multiplier[10] | No rollover after Order End Date | 2026-06-17 |
| Citrix | Flex Credit | Credits deducted monthly per Persona[18] | Forfeited at term end | 2026-08-12 |
| ServiceNow | Workflow Data Fabric tokens | Tokens expended per capability[20] | Pack size on Order Form | 2026-03-12 |
| ServiceNow | Assist credits | 250 credits per node or improvement opportunity[26] | Five follow-up analyses free | 2026-03-12 |
| Atlassian | Rovo Dev credit | Usage of Rovo Dev AI features[21] | 2,000 per developer per month (Standard) | 2025-10-07 |
Programs and rules:
Relationship to other license models
Subscription and consumption are commercial models layered over units of measure. A SaaS subscription is usually counted as in named user licensing, a term license for infrastructure software as in processor and core licensing, and SAP’s RISE subscription uses FUEs for user access and Documents for Digital Access.[27] For an effective license position, a subscription adds a time dimension: entitlement exists only while the term runs, and a consumption balance adds a monetary one, since the question becomes whether credits will last to the end of the period.
Criticism and challenges
The vendor terms show several risks for licensees. Prepaid balances can be lost: Oracle forfeits unused Annual Universal Credit at the end of each credit period,[9] Autodesk provides no credit or refund when tokens expire,[4] and Salesforce permits no rollover of Flex Credits.[10] Consumption can occur without use, as with Citrix Personas that are configured but idle.[19] Rates can change: Autodesk’s 2021 Flex rate sheet listed Fusion 360 at 2 tokens per day, while its live buying page in August 2026 showed 3, and the rate sheet reserves the right to modify daily rates prospectively.[4] Government auditors have also found that organizations without regularly maintained license inventories cannot tell whether they have bought too many or too few licenses.[28]
Out of scope
This article does not cover cloud infrastructure pricing, discount levels, or accounting treatment of subscriptions. Bring-your-own-license rules for public clouds are in Cloud BYOL and authorized cloud environments. Vendor detail is on Autodesk Single User and Flex licensing, Salesforce User and consumption licensing, ServiceNow user and subscription-unit licensing and Atlassian Cloud and Data Center licensing meters.