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For years, Cisco relied on Product Activation Keys, or PAKs, to license the operating systems, software and even certain features that ran on its networking hardware. This process was generally cumbersome and required additional steps for customers during the purchase and installation processes.
PAK licenses were device-specific and licensed to an individual organization. The licenses were nontransferable if a company decided to sell older equipment to a third party. Each device needed to be registered individually and could only be unlocked with a specific license key. Frequently, enterprise customers ran into problems when the PAK information was emailed to one person in the company but the equipment was being installed by another.
The PAK process benefitted Cisco by giving it more control over the software aspects of its equipment, but it also created frustration among Cisco customers. Sales of used Cisco products still occurred, but often fraudulent methods were used to unlock the software after being sold to a third party. Cisco added additional security processes, such as PIN numbers, to help combat fraud, but a more comprehensive approach was required.
In 2018, Cisco revamped its licensing process by introducing the Cisco Smart Account, moving licensing to a cloud-based portal and subscription pools that enable a company to have full visibility over all their licenses at an organizational level. Cisco Smart Licensing gives customers more control over their purchases and enables them to visualize where all their assets are deployed. As long as the pool has enough licenses, customers can move licenses between equipment more easily without engaging Cisco.
Some PAK-based licenses can be converted to Smart Licenses if a comparable Smart License is available. Cisco Smart Licensing tools enable a customer to manage traditional PAKs alongside the new Smart Licenses, but the transition to a fully Smart-based world for Cisco licenses is probably years away. A fully Smart License-based environment is ultimately driven more by the obsolescence of legacy products as buying patterns continue to shift away from those older products.
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