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The Science Behind Co-Termination

Co-Termination Summary 

Following a customer’s initial license purchase, if the customer purchases a new license in connection with a new hardware unit or purchases a new license for an existing hardware unit, then the term of each license (new and existing) in the customer’s organization will be automatically adjusted so that all of the customer’s licenses terminate on the same date. This concept is referred to as “co-termination” and is described in more detail below. The following is a conceptual example.

Assume the original purchase included ten APs, each with a 1-year license. Also assume four months into the license term there are six additional APs added, each with a 1-year license. Extra credit is applied with value of 4 additional months * 6 additional APs = 24 additional 'AP-months'. This gives an additional 24 months / 16 total AP's in the organization = an additional 1.5 months to the license term for the whole organization. 

license-calc-diagram.png

Detailed Explanation 

This section describes in detail each step of the co-termination algorithm which is reflected mathematically in the next section. The dollar value of each license, for purposes of the co-termination calculation, is the one-year list price of the applicable license purchased (the “Base Price” of such license — see table of base prices below).

The co-termination date is then computed by, first, determining the amount of time remaining on the existing licenses in a customer’s organization by subtracting the license expiration date (available in the customer’s Dashboard account) from the current date (such difference, the “Remaining Days”).

The amount of additional time allocable to the new licenses purchased is determined by multiplying a one-year period of 365 days by the term (of years) of the new licenses purchased (the “New Time Purchased”) and subtracting from the New Time Purchased the number of days of Remaining Days (such difference, the “Incremental Days,” expressed in days).

The Incremental Days is then converted to a dollar-value unit of time by adding together, for each type of new license purchased, the product of (i) Incremental Time, (ii) the Base Price of the such new license-type purchased, and (iii) the number of such new license-type purchased (the sum of all such products, the “Incremental Dollar Days”).

In order to determine how many additional days the new purchase adds to the license term of a customer’s organization, the daily usage rate of these dollar-value units of time must be calculated. This is determined by adding together, for each type of license in the organization, the product of (i) the Base Price of each license type and (ii) the number of licenses of such type (the sum of all such products is your Network’s “Daily License Usage Rate”).

The actual number of incremental days to be added to the organization’s licenses as a result of the new purchase is calculated by dividing the Incremental Dollar Days by the Daily License Usage Rate (such quotient, the “Incremental TIme Purchased”).

The new co-termination date is finally calculated by adding the Incremental Time Purchased to the Remaining Days.

License Base Price Table

NOTE: The table below does not include all licenses. Additional base price information for other products can be found by visiting: https://meraki.cisco.com/support/#policies:licensing and base prices for all available products can be found at https://meraki.cisco.com/buy/cost-calculator.

 

Product License Edition Base Price
Wireless AP Enterprise $150.00
MX60 Enterprise $250.00
MX60 Advanced Security $500.00
MX60W Enterprise $275.00
MX60W Advanced Security $550.00
MX64 Enterprise $300.00
MX64 Advanced Security $600.00
MX64W Enterprise $325.00
MX64W Advanced Security $650.00
MX65 Enterprise $325.00
MX65 Advanced Security $650.00
MX65W Enterprise $400.00
MX65W Advanced Security $800.00
MX80 Enterprise $2,000.00
MX80 Advanced Security $4,000.00
MX84 Enterprise $1,000.00
MX84 Advanced Security $2,000.00
MX100 Enterprise $2,500.00
MX100 Advanced Security $5,000.00
VMX100 Enterprise $2,500.00
MX250 Enterprise $5,000.00
MX250 Advanced Security $10,000.00
MX400 Enterprise $8,000.00
MX400 Advanced Security $16,000.00
MX450 Enterprise $10,000.00
MX450 Advanced Security $20,000.00
MX600 Enterprise $16,000.00
MX600 Advanced Security $32,000.00
Z1 Enterprise $50.00
Z3 Enterprise $150.00
MS320-24P Enterprise $325.00
SM --- $40.00

The Math 

This section expresses in mathematical terms the detailed explanation of the co-termination algorithm described in the previous section.

Definitions:

  • Remaining_Time = Time remaining on life of original purchase, expressed in seconds
  • New_Time_Purchased = Life of new licenses purchased (i.e., 1-year, 3-year, 5-year, 7-year, or 10-year)1

 

To calculate the new termination date of your network at the time of purchase of additional devices for your network:

  1. Determine the amount of time remaining on your current network, before the new purchase, or 0, whichever is greater 
  2. Calculate Incremental_Network_Time purchased on new devices only 
  3. Convert Incremental_Network_Time into Incremental_Dollars_Days, for new devices only 
  4. Calculate the Daily License Usage Rate of your entire network, including all your existing and new devices 
  5. Convert Incremental_Dollars_Days into Incremental_Time_Purchased 
  6. Add Incremental_Time_Purchased to Remaining_Time to calculate Remaining_Time2 of your new network 

Note: In the Meraki dashboard a unit of time is one second.

Examples 

Co-Termination Example Problem A:

On January 1, 2013, you purchased and activated five Wireless MR16s with 1 year licenses for your network.
Today is May 8, 2013 (127 days later). You purchase and activate two MX80s with 3-year Advanced Security licenses to be added to your network.
Calculate in days the remaining time you have on your network.

Solution
  1. Remaining_Time_1 = January 1,2014 - May 8,2013 = 238 days
  2. Incremental_Network_Time = 1,095 days - 238 days = 857 days
  3. Incremental_Dollars_Days = 857 days × $2,000 × 2 = 3,428,000 dollar days
  4. Daily License Usage Rate = (5 MR16s × $150) + (2 MX80s × $2,000) = $4,750
  5. Incremental_Time_Purchased = (3,428,000 dollars days) / $4,750 = 722 days
  6. Remaining_Time_2 = 722 days + 238 days = 960 days remaining on new network

Co-Termination Example Problem B:

On January 1, 2013, you purchased and activated twenty wireless MR24s with 3-year licenses and one MX400 with a 3-year Advanced Security license for your network. Today is May 8, 2013 (127 days later). You purchase and activate an additional twenty-five wireless MR16s with 3-year licenses to be added to your network.
Calculate in days the remaining time you have on your network.

Solution
  1. Calculate Co-Term of January 1, 2013 Purchase (adding MX400 to MR24s on same day)
  2. Remaining_Time_1 = January 1,2016 - January 1,2013 = 1,095 days
  3. Incremental_Network_Time = 1,095 days - 1,095 days = 0 days
  4. Incremental_Dollars_Days = 0 days × $16,000 × 1 = 0 dollar days
  5. Daily License Usage Rate = (20 MR24s × $150) + (1 MX400 × $16,000) = $19,000
  6. Incremental_Time_Purchased = (0 dollars days) / $19,000 = 0 days
  7. Remaining_Time_2 = 1,095 days + 0 days = 1,095 days remaining on new network

 

  1. Calculate Co-Term of May 8, 2013 Purchase (adding twenty-five MR16s to existing network)
  2. Remaining_Time_1 = January 1,2016 - May 8,2013 = 968 days
  3. Incremental_Network_Time = 1,095 days - 968 days = 127 days
  4. Incremental_Dollars_Days = 127 days × $150 × 25 = 476,250 dollar days
  5. Daily License Usage Rate = (20 MR24s × $150) + (1 MX400 × $16,000) + (25 MR16s × $150) = $22,750
  6. Incremental_Time_Purchased = (476,250 dollars days) / $22,750 = 21 days
  7. Remaining_Time_2 = 968 days + 21 days = 989 days remaining on new network

Co-Termination Example Problem C:

On January 1, 2013, you purchased and activated fifteen Wireless MR16s with 5-year licenses. On June 30, 2013, you purchased and activated one MX80 with a 3-year Advanced Security license. Today is March 31, 2015 and you purchase and activate two MS42P Switch with a 1-year license.
Calculate in days the remaining time you have on your network.

Solution
  1. Calculate Co-Term of June 30, 2013 Purchase (adding MX80 to MR16s)
  2. Remaining_Time_1 = December 31,2017 - June 30,2013 = 1,645 days
  3. Incremental_Network_Time = 1,095 days - 1,645 days = -550 days
  4. Incremental_Dollars_Days = -550 days × $2,000 × 1 = -1,100,000 dollar days
  5. Daily License Usage Rate = (15 MR16s × $150) + (1 MX80 × $2,000) = $4,250
  6. Incremental_Time_Purchased = (-1,100,000 dollars days) / $4,250 = -259 days
  7. Remaining_Time_2 = -259 days + 1,645 days = 1,386 days remaining on new network
  8. Co-termination Date = June 30, 2013 + 1,386 days = April 16, 2017

 

  1. Calculate Co-Term of March 31, 2015 Purchase (adding two MS42Ps to existing network)
  2. Remaining_Time_1 = April 16,2017 - March 31,2015 = 747 days
  3. Incremental_Network_Time = 365 days - 747 days = -382 days
  4. Incremental_Dollars_Days= -382 days × $200 × 2 = -152,871 dollar days
  5. Daily License Usage Rate = (15 MR16s × $150) + (1 MX80 × $2,000) + (2 MS42Ps × $200) = $4,650
  6. Incremental_Time_Purchased = (-152,871 dollars days) / $4,650 = -33 days
  7. Remaining_Time_2 = -33 days + 747 days = 714 days remaining on new network
  8. Co-termination Date = March 31, 2015 + 714 days = March 14, 2017

FAQ 

What is the exact unit of time that is used for the licensing calculations?

Seconds. “Incremental Dollar Days” are actually computed in terms of incremental seconds in order to ensure precision in calculating the term of the licenses purchased. Once the exact expiration time is computed, actual license expiration is rounded to the nearest day and enforced at 9am Pacific Time on that day.

What happens if I purchase a new order with multiple different license lengths (e.g., 1 MR24 with a 1-year license, 1 MS42P with a 1-year license, and 3 MX100s with 3-year licenses)?

Each iteration of the co-term formula is only run with respect to licenses of the same term. So when new licenses are purchased on the same order with different terms, the co-term calculation is run multiple times. The calculations are run in the order of license addition. In the above example, the co-term calculation would first be run on the MR24 and MS42P, with the first co-term date calculated; a new co-term date would then be calculated using the first co-term date and the MX100 license for 3-years.

What is the difference between license renewals and adding licenses/devices?

The co-termination calculation for renewals only (no new devices being added) is slightly different because the total license time in the customer’s organization is not being ‘spread’ across any additional devices in the case of a renewal. Accordingly, when renewing the licenses for existing devices, the Incremental Dollar Days are calculated as a function of the entire term of the license (i.e., license term in years multiplied by a year of 365 days). In contrast, when purchasing a license for a new devices, the Incremental Dollar Days is calculated as a function of the “Remaining Time,” that is, the difference between the term of the new license and the amount of time remaining under the customer’s existing licenses.

Expressed mathematically, the difference in the two formulas is as follows:

Renewal Incremental_Dollar_Days = New_Time_Purchased * Count of Device * Device Base Price
New Device Incremental_Dollar_Days = (New_Time_Purchased - Remaining_Time) * Count of Device * Device Base Price

For more information about license renewals and adding more devices, please refer to our Licensing Guidelines and Limitations article. 

What happens when upgrading from Enterprise to Advanced Security licenses?

When purchasing MX products, a customer must either choose Enterprise licenses for those products or Advanced Security licenses — but not both. If a customer wants, for instance, to upgrade to the Advanced Security functionality on its MX devices and purchases new MX licenses, the co-termination calculation is re-run because the Advanced Security licenses are more expensive. This means that both the Incremental Dollar Days and the Daily License Usage Rate will be adjusted since each is calculated as a function of the Base Price of the licenses.

Is there a place I can easily run a sample co-termination calculation myself?

Yes. The Meraki Dashboard includes a manual co-termination calculator. To access it, first create a dashboard account for free by clicking here. Then click here to be taken to the co-termination calculator.

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