Technical Refresh in Co-Term Organisation: Avoiding the licensing trap
When Meraki Hardware Refreshes Create Ghost Licenses
Infrastructure refresh projects are often planned as a straightforward replacement exercise: old devices are removed, new devices are installed, and the environment continues operating with equivalent capacity. However, organisations operating under Cisco Meraki co-termination models may encounter unexpected licensing outcomes if not duly considered.
This article examines a common licensing pitfall that can occur during hardware refresh projects and explains how to avoid unexpected licensing costs and compliance issues.
Problem
An organisation is replacing aging infrastructure that has reached end-of-support or no longer meets operational requirements.
The new devices are intended to replace existing equipment on a one-for-one basis.
From a business perspective, nothing is being expanded:
No additional users
No additional sites
No additional capacity
No increase in device count
The organisation simply wants to modernise its infrastructure.
However, after applying new licensing, the organisation discovers that its licensing consumption has increased unexpectedly and its projected licensing expiry date has decreased.
Environment
Existing Licensed Environment
| Device | Count |
|---|---|
| MX Appliance | 1 |
| MS Switch | 2 |
| MR Access Point | 20 |
Procured
If the organisation had procured
| Description | Quantity |
|---|---|
| New CW9174I AP | 20 |
| LIC-MR-3Y | 20 |
Expected Outcome
Most organisations assume the platform will recognise that the old AP have been refreshed, and the new AP licenses are added on to the co-term date, resulting in the new licenses being split across the MX, MS, and new AP only.
Actual Outcome
Cisco Meraki allows two options for co-termination licenese: Add new devices or Renew licenses.
Renew licenses: When using the new claim key, the old devices are removed from the licensed devices, and the result is that only the APs are licensed, with the MX and MS being in an un-licensed state.
Add new devices: When using the new claim key, the new licensed device state becomes:
| Device | Count |
|---|---|
| MX Appliance | 1 |
| MS Switch | 2 |
| MR Access Point | 40 |
The Ghost License Effect
A ghost license occurs when licensing is calculated against devices that no longer provide any business value.
In this scenario:
Twenty devices effectively exist only within the licensing calculation.
The organisation receives no operational benefit from these additional entitlements, yet the licensing pool is now being shared across a larger inventory.
Common consequences include:
Reduced licensing duration
Reduced remaining subscription value
Confusing inventory reporting
Compliance concerns during audits
Root Cause
The root cause is not usually a licensing bug.
Instead, it’s a limitation of the licensing logic used by Cisco Meraki. Having only ‘Add more devices’ and ‘Renew licenses’ does not take into account the unique (but common) technical refresh where only a subset of licenses are added without changing the quantity of devices.
Business Impact
This issue typically appears during:
Network refresh projects
Hardware lifecycle replacements
Wireless infrastructure upgrades
Security appliance upgrades
Switching platform migrations
End-of-support remediation projects
Because refresh projects are often budget-sensitive, discovering that licensing value has been diluted across a larger than expected inventory can lead to unexpected costs.
Recommended Solution
For organisations using Cisco Meraki, and going through a technical refresh, the following strategies may be used to solve this edge scenario:
Renew the entire organisation licenses at the time of technical refresh, purchasing the MX MS and MR licenses, then selecting ‘Renew licenses”. However, businesses may not have the budget for an entire renewal at this point in time.
Do not purchase the MR licenses with the technical refresh, and defer the licensing until the actual renewal period. However, business units may question why the access points need to be renewed a few months after procurement.
Switch to subscription model. Cisco supports a subscription model which allows more flexibility in licensing, and is licensed per network. This means that if on co-term you were licensing 20 offices at once, you can now split this into separate licenses with smaller impact when changing specific offices. The downside of this is that you lose the convenience of a co-termination date and have to track multiple renewal dates.
Remediation
If you are in the unique situation where you have already procured the licenses and are thinking about how to get around this issue you might think that opening a customer service ticket to remove the old, unused devices would be the simple solution to this. However, the customer service is unable to remove devices from the dashboard. They might even suggest moving the access points to a new dashboard but ultimately the help they can provide in this situation is limited.
The method we utilized after talking to support, account managers and licensing specialists is to do an RMA of the new licenses (within 30 days), then push the procurement of the licenses back until the entire network is due for refresh. Unfortunately this means the price of the licenses may be subject to price increases.
Alternatively, you could create a new organisation dashboard where the new devices will sit until it’s time to renew the other devices, then re-consolidate the devices in one dashboard. This is definitely not acceptable if you’re a reseller or MSP and have to explain to your customers why you have two dashboards instead of one.
Conclusion
A hardware refresh does not always translate into a licensing refresh.
While IT teams may view a project as a straightforward one-for-one replacement, licensing systems may interpret the same activity as an expansion of the environment. The result is often the creation of "ghost" licenses, where licensing value is consumed by devices that no longer provide any operational benefit.
Before undertaking any infrastructure refresh project, organisations should confirm how their licensing platform handles replacement scenarios and validate the resulting inventory and licensing calculations before applying new entitlements. Doing so can prevent unexpected costs, preserve licensing value and avoid compliance issues during future renewals.
Megatron Technology Pte Ltd (est. 1990, UEN 199002644W) is a Singapore Cisco Networking Partner and Managed Services Provider, and a Fortinet reseller. We design, size, licence, procure, deploy and support Cisco Meraki, FortiGate, and Cisco Catalyst & Data Centre from 2 Kallang Avenue #08-17 CT Hub, Singapore 339407.