Introduction to Cisco IOS Software Activation and Licensing Workflows
If you are confused by the newer IOS activation feature for our Catalyst Switches and IOS Routers or maybe you are wanting a more visual explanation of how the Cisco IOS Activation Process actually works? Then you should spend a moment viewing the Cisco IOS Activation & Licensing Workflow. It takes about 20 minutes from start to finish but it is a very thorough walk through and should clear up any outstanding question you may have. I watched it myself last night and I found it to be a very good walk through. (BTW - I recommend you get familiar with the IOS Activation Process)
Click here to view the workflow: IOS Activation & Licensing Workflow
In case you would prefer to read about the activation process instead of watching an explaination, there is also a Conceptual Overview document that does an excellent job of explaining the IOS activation process as well.

Comment by Tassos on 17 July 2008:
From http://www.cisco.com/en/US/prod/collateral/iosswrel/ps6537/ps9677/whitepaper_cisco_sw_license.html
“When the device is first powered on, the Software Activation License is examined by Cisco IOS Software, which activates the appropriate feature sets.”
What will happen if the License is not valid?
Does this mean the end of dynamips?
Comment by Joe Harris on 18 July 2008:
Tassos that’s a very good question because this could even happen accidentally (more on this in a sec), if the license is not valid it will fall back to the base level which is IP Base. The switch/router will still boot and function but with only IP Base level features.
There is a new command introduced in 12.4(20)T ‘license expand nvram’ command. Now if you use this command what do think will happen if you hit a bug and downgrade code to a version of code that doesn’t support that command? If a user downgrades to a Cisco IOS image that does not support the licenses or the expand nvram command, all licenses stored in NVRAM will be lost. This will happen even if the image stores licenses in NVRAM and thus you would lose your licensed features which could be advanced ip services or whatever because you’ll back down to IP Base code which doesn’t support the feature…Bottom line…keep a copy of the .lic file
Comment by Tassos on 22 July 2008:
Thanks for the explanation Joe.
I understand that Cisco needs to take care of its IOS intellectual rights, but i don’t find all this IOS activation/licensing easy.
“Cisco makes it easier for customers to deploy, manage, and upgrade their Cisco IOS Software assets”.
I still haven’t tried it, but by only reading/watching it, i felt “tired”. For me it doesn’t seem as easy ‘n’ simple as downloading an IOS from CCO and uploading it on a router.
Let’s hope it’s a move to the correct direction and not something that will be abandoned after 2-3 years…having put into bedevilment a lot of customers.
Btw, does the “sh ver” output display somehow the actual activated feature set?
Comment by Lalufu on 24 July 2008:
I just hope that getting licenses for IOS will be a faster process than getting licenses for PIX/ASA devices (which could take several weeks in my experience, but I may be doing things wrong).
Comment by Ferret999 on 24 July 2008:
Hi Joe,
What does the new license software mean for Dynamips? Also is it true that Cisco has their own internal emulation software?
Comment by Joe Harris on 25 July 2008:
I won’t comment on Dynamips, but we do have an internal tool and it’s my understanding based on some emails I see flying around as of late that we will be releasing this tool to customers and partners alike in the coming months in a controlled manner like via Cisco Academies and such.
Comment by Ferret999 on 25 July 2008:
Cheers for the reply Joe. Would be good if Cisco release some tool out there although I hope release is not to controlled. Some of us work for companies that do not pay for our training so we have to pay for it all off our own back and so if they could bear people in my position in mind if they do decide to release the emulator that would be great.