What Rightsizing Means in ServiceNow Licensing
Rightsizing is the practice of adjusting your ServiceNow license counts and roles to match real-world usage rather than vendor-inflated estimates or outdated assumptions.
In other words, ServiceNow license rightsizing is about eliminating shelfware – those extra licenses sitting idle – and aligning your entitlements with reality. This license optimization strategy ensures you’re not overspending for idle, underutilized capacity.
Think of it in two parts: reducing total licenses if you have more people than you use, and adjusting user roles to the right level. For example, you might find you can drop several dozen Fulfiller licenses that no one is actively using (license count rightsizing). Or you might discover that many users assigned to expensive Fulfiller roles only ever approve tasks or read information. These users could be downgraded to cheaper roles like Approver or free Requester (role rightsizing).
Read our comprehensive guide, ServiceNow License Optimization: Rightsizing, Recycling & Shelfware Cuts.
ServiceNow’s pricing model magnifies over-provisioning, especially with Fulfiller licenses. Every unnecessary Fulfiller sitting idle is money leaking out of your budget.
Mini-Scenario: An insurance firm ran a usage audit and discovered 500 Fulfiller licenses that hadn’t been used in months. They removed those unused licenses before renewal. The result was about $450,000 in annual savings and much stronger leverage when negotiating their next contract.
Pro Tip: Rightsizing isn’t about cutting anyone’s access – it’s about eliminating waste that’s disguised as “flexibility.” You’re not taking away useful tools; you’re just cutting out licenses that aren’t actually being used.
Step 1 – Map Current License Utilization
The first step is understanding exactly what you have. Start with a thorough license utilization audit.
Use ServiceNow’s built-in Subscription Management module or reporting dashboards to get a baseline. Pull data on all your licensed users – who they are, what role/license type they have (Fulfiller, Approver, etc.), and when they last logged in or performed meaningful activity. This will tell you how many licenses are actively being used versus sitting idle.
Next, identify underused modules and misallocated roles. Are there entire ServiceNow modules (like HR Service Delivery, IT Asset Management, or IT Operations Management) that your organization purchased but barely touches? If one department bought licenses for a module and hardly anyone uses it, flag that for possible removal.
Also, examine roles closely: how many people with Fulfiller licenses only log in occasionally to approve or view requests, without actually working on tickets or records? Those are prime candidates for a role downgrade.
Checklist: Data to Collect for Rightsizing
- Active users in the last 60–90 days (per license type)
- Number of licenses by role (e.g. how many Fulfillers, Approvers, Requesters)
- Module usage metrics (tickets resolved per user, HR cases handled, assets tracked, etc.)
- Inactive user accounts or licenses assigned to departed staff
- Purchased license counts vs. actual peak consumption
Gathering this data gives you a factual map of usage. You might be surprised by the percentage of licenses that are inactive or underutilized.
Mini-Scenario – The Fulfiller Trap: A telecom company discovered that 40% of its users with expensive Fulfiller licenses hadn’t resolved a single ticket in months. These users were managers and observers who didn’t need full platform access. The company downgraded half of those Fulfillers to Approver roles (which cost far less) and reclaimed the rest entirely. That simple change reduced their ServiceNow spend on ITSM licenses by 28% without impacting any workflow.
Step 2 – Reallocate or Remove Excess Licenses
Now that you know where the waste is, the next step is to take action on those excess licenses. Reallocate wherever possible before considering any new purchases.
First, classify your users by what they actually do on the platform. Align each person’s role to their real usage:
- Power users = Fulfiller: These are the people who actively work on tickets, develop workflows, or need full access. They keep the expensive Fulfiller licenses.
- Managers/approvers = Approver: Users who mainly review or approve items (and rarely create or edit records) can use an Approver role. Approver users typically cost significantly less than Fulfillers (or are even free in some licensing models).
- General employees = Requester: Everyone else who just submits requests or checks their ticket status can be a free Requester. No paid license needed.
Next, deactivate or reclaim dormant licenses. If a user hasn’t logged in or done anything in 60+ days, consider their license unused. Remove those accounts or at least strip the license role and put it back into a pool.
This ensures you can reassign that license to a new hire or growing team without buying extra. Always check with HR or managers to confirm if those people have left the company or changed duties. Setting up an HR offboarding process that automatically flags and reclaims licenses when someone leaves will close these gaps.
Also, rationalize module ownership across your organization. It’s common for large companies to end up with overlapping licenses – for example, two business units each buying a few IT Asset Management seats when one centralized pool would do. Look for opportunities to consolidate these.
If a certain module or feature is barely used, consider dropping it entirely in the next renewal. Why pay maintenance on a product that only a handful of people opened once or twice? Focus your spend on modules with clear, regular usage.
Pro Tip: Reassign before repurchasing. License waste often hides in offboarding gaps and inactive accounts. Always reuse what you have on the shelf (unused licenses) before you even think about paying for one more seat.
How to identify shelfware, Identifying & Eliminating ServiceNow Shelfware (Unused Licenses).
Step 3 – Convert High-Cost Roles or Modules
Rightsizing isn’t only about removing licenses; it’s also about converting high-cost items to cheaper alternatives. Start with user roles.
Role downgrades: For every user currently holding a pricey Fulfiller license, ask if they truly need that level of access. Many managers and senior staff just oversee work – approving tasks or viewing dashboards – and rarely perform hands-on work in ServiceNow.
Those users can be downgraded from Fulfiller to an Approver role without losing productivity. The cost difference is dramatic; each such downgrade can save your organization 60–80% of that user’s license cost. In other words, you could pay a fraction of the price for the same person to do their job if they don’t need full rights.
Module simplification: Examine your ServiceNow products to see if you’re paying for “Pro” or high-tier versions that you’re not fully utilizing. For instance, if you have ITSM Pro but your team isn’t taking advantage of its advanced features (like Predictive Intelligence or Virtual Agent), you might be better off on the Standard edition. You can revert to a less feature-rich license tier and slash costs, with minimal impact on your operations if those premium features were barely used anyway.
Consolidate similar licenses: Sometimes ServiceNow sells separate modules that have overlapping capabilities (for example, IT Asset Management and Software Asset Management). If you have two products covering similar needs, consider whether one can be dropped. It might be more efficient to expand one module’s usage to cover all needs than to maintain two parallel licenses. Similarly, if you have multiple ServiceNow instances or contracts due to acquisitions or siloed purchasing, look at merging them to eliminate duplicate licensing.
Mini-Scenario: A manufacturing company realized it was paying for ITSM Pro, but 90% of their users never touched the AI-driven features included in Pro. These users were essentially using only standard incident and change management. At renewal, the company switched from ITSM Pro to ITSM Standard licensing. This move saved them roughly $380,000 annually, with no noticeable loss of functionality for their teams.
Pro Tip: Every Fulfiller-to-Approver downgrade is a huge win – often saving 60–80% of that user’s cost. Multiply that across dozens of users, and you’re looking at a massive budget impact, just by aligning roles with actual needs.
Step 4 – Align Rightsizing with Renewal Negotiations
Rightsizing efforts have the most payoff when you bring them to the negotiating table. As your ServiceNow renewal approaches, use your findings to drive a better deal.
Build a data-backed proposal for renewal. Come armed with the hard numbers from your utilization audit: if you purchased 2,000 Fulfiller licenses but only 1,200 are actively used, you should only renew what you truly need. When you present ServiceNow with concrete usage data, it’s hard for them to push back on reducing counts. You’re not asking for a favor; you’re presenting facts.
Prepare a “true-down” position as you enter talks. This means you are intentionally aiming to reduce the total license count (and cost) based on your rightsizing analysis. Be ready for the vendor to resist — they may try to upsell other products to make up the difference or insist on minimum quantities. Stand firm in your decision that you cannot continue paying for shelfware.
If they absolutely won’t budge on lowering the count, use that as leverage to get something in return. For example, if ServiceNow insists you keep a higher number of licenses, request a price reduction or credits in exchange: “Okay, if we must keep 2,000 licenses on paper, we expect a multi-year discount or an extra module included at no charge.” Use your leverage; your data justifies a better value.
Checklist: Before Your ServiceNow Renewal
- Document your current license usage versus purchased entitlements
- List which licenses or modules you plan to drop or downgrade (with justification)
- Define the target counts for each license type in the future (your “true-down” numbers)
- Plan your negotiation asks: reductions in licenses, or, if not possible, discounts/credits in return
- Get internal buy-in on the rightsizing plan from stakeholders before talking to the vendor
Finally, formalize your new internal license baselines post-renewal. Update your records or SAM tools with the adjusted entitlements (e.g,. 1,200 Fulfillers, 300 Approvers, etc.). This becomes the benchmark for future monitoring.
By documenting the rightsized counts, you ensure that next year you’re comparing against the correct baseline, not the old inflated one. It also helps prevent gradual creep – with a clear baseline, any requested increase next time will stand out and must be justified by real usage.
Pro Tip: The cleanest data wins the negotiation. Walk into renewal discussions with undeniable usage facts and trends. ServiceNow’s reps are far less likely to argue when you can show exactly what licenses went unused. Facts trump sales pressure.
Step 5 – Establish Ongoing Rightsizing Governance
The job isn’t over after one round of adjustments – the key is to keep your license allocation optimized continuously. Make rightsizing a habit through governance and regular practice.
Set up quarterly license reviews. Rather than waiting for the annual renewal scramble, examine your ServiceNow usage every quarter. Create a simple report that shows active users, new users added, and any accounts with no logins in the last 90 days. Regular reviews help you catch emerging shelfware early. For example, if a certain team’s usage drops after a project ends, you can scale back their licenses right away instead of discovering the surplus at the next renewal.
Create clear ownership and accountability for license usage. Assign a “license owner” or steward for each major ServiceNow module or department. This person is responsible for monitoring how their group is using (or not using) its allocated licenses. They should report quarterly on utilization.
By making someone accountable, you ensure that optimizing licenses becomes part of normal operations, not just a once-a-year fire drill. Also, include license utilization as a metric in IT and finance reviews. When reducing waste is part of performance goals, it gets the attention it deserves.
Automate alerts and reassignments where possible. ServiceNow can be configured to help with this.
For instance, set up a scheduled job or alert to flag any user account that hasn’t logged in for 60 days. Your team can review those flags and decide to deactivate or reallocate those licenses. You could even automate the removal of roles from inactive users (with an email notification to their manager). By using automation, you catch idle licenses quickly and keep your usage tight without constant manual effort.
Pro Tip: Make automation your ally. A continuous rightsizing process – with automated usage alerts and regular check-ins – means no more last-minute panics at renewal time. Instead of a yearly scramble to cut costs, you maintain an efficient license footprint year-round.
Conclusion
Rightsizing your ServiceNow environment comes down to one principle: control. You take control of your licenses, your spending, and your negotiation power. By aligning license counts and types to actual usage, you avoid wasting money on the vendor for nothing in return.
Remember, ServiceNow isn’t going to voluntarily tell you that you’re over-licensed – it’s on you as the customer to find and eliminate that waste.
The payoff is significant. You reduce your ServiceNow spend immediately by trimming the excess, and you enter renewal negotiations from a position of strength with data in hand.
Perhaps more importantly, you ensure that every dollar invested in ServiceNow is actually supporting your team’s work, not sitting on a shelf.
Read about our ServiceNow Optimization Services.
