Q: Do the devices (wireless controllers) have to be connected directly to the cloud if the customer wants to use smart licensing?
A: No. Smart licensing allows two main modes of connecting to the smart licensing portal: (1) Data to be sent directly to the cloud by the controller (using HTTPS and HTTPS proxy) and (2) data to be sent to the cloud by the controller via an on-premises satellite collector (such as the Smart Call Home Transport Gateway that is available as a VM download at no cost). Please refer to the deployment guide for more details.
Q: Is smart licensing the only licensing option for smart enabled wireless controllers or can the customer continue to use RTU licensing?
A: Smart licensing is optional. If the customer does not wish to use smart licensing on controllers enabled for smart licensing, the customer can continue to use RTU licensing on the 5520, 8540, and vWLC. For additional questions regarding RTU licensing, refer to https://www.cisco.com/c/en/us/products/ collateral/wireless/flex-7500-series-wireless-controllers/ qa_c67-713536.html.
Q: What will happen if the customer tries to connect more access points to the controllers of a particular product family than the number of licenses the customer has for that controller family?
A: The pooled license count will go negative for that controller model family. The customer will get a notification that they are out of compliance. The network operation will not be disrupted while the customer makes arrangements to get back into compliance.
Q: Who will be notified if the customer goes out of compliance?
A: The smart account creator (the customer or the partner, in the case of partner-managed accounts) can set who gets notified when the customer goes out of compliance.
From https://www.cisco.com/c/dam/en/us/products/collateral/wireless/8500-series-wireless-controllers/q-and-a-c67-736416.pdf
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