--- sourceDocument: Australia Enable AI sourceDocumentLink: https://www.servicenow.com/docs/r/australia/intelligent-experiences Release : - australia ft:locale : - en-US ft:publication_title : - Australia Enable AI ft:clusterId : - platai bundleId : - platai workflow : - Platform --- # Subscription-based costs # Subscription-based costs for AI vendors {#ariaid-title1} Release version: Australia Updated September 24, 2026 ![](https://www.servicenow.com/docs/portal-asset/ico-clock) 2 minutes to read Summarize ![AI sparkle icon](https://servicenow.com/docs/portal-asset/ai-sparkle-icon) Summarized using AI This content was generated using new OpenAI-powered functionality. Results are provided on an as is basis and are not guaranteed to be accurate or complete. ## Summary of Subscription-based costs for AI vendors The Subscription cost type in AI Control Tower enables ServiceNow customers to track costs from AI vendors that bill on a subscription or seat-based pricing model. This billing method involves a fixed monthly price per licensed seat under a defined contract period, rather than usage or token-based charges. Subscription costs remain constant throughout the contract regardless of token consumption, providing clarity and accuracy in cost tracking. Show full answer Show less ## Key Features * **Subscription Cost Type:** Designed for vendors charging a fixed monthly fee per licensed seat, allowing organizations to input contract value once and reflect true spend on dashboards. * **Configuration Timing:** Subscription costs are configured during AI Control Tower onboarding (day zero experience) alongside other cost types but can be updated later with new values effective from the next day forward. * **Cost Components:** * Number of licensed seats and price per seat (both mandatory). * Contract start and end dates to define the billing period. * An optional one-time setup fee that some vendors charge to enable seat-based pricing or discounts. * An amortization period to spread the one-time setup fee evenly across months, defaulting to contract length but adjustable. * **Monthly Cost Calculation:** AI Control Tower calculates monthly subscription cost as the sum of (licensed seats × monthly cost per seat) plus the amortized portion of any one-time setup fee. ## Practical Application ServiceNow customers can use this subscription cost model to accurately represent vendor expenses that are fixed per user seat. This ensures financial reports and dashboards align with actual contract payments rather than fluctuating usage metrics. The ability to add or update subscription costs anytime supports ongoing cost management and transparency. ## Example For a contract with 1,000 seats at $25 per seat monthly and a $20,000 one-time setup fee amortized over 14 months, the monthly cost calculated by AI Control Tower would be: * Seat cost: 1,000 × $25 = $25,000 * Amortized setup fee: $20,000 ÷ 14 = $1,428.57 * **Total estimated monthly cost: $26,428.57** Use the Subscription cost type in AI Control Tower to track vendor costs billed per licensed seat under a fixed-term contract rather than by token or usage. ## Subscription-based cost overview {#mc-subscription-based-cost-for-ai-vendors__section_overview} Subscription-based cost, also called seat-based pricing, is a cost type for AI vendors that bill through a contract with a fixed monthly price per licensed seat. It's available alongside the existing overall cost and input and output cost options. In a seat-based contract, you purchase a specified number of seats at a fixed price per seat for a defined contract period. Because the contract does not limit token consumption, the subscription cost calculated by AI Control Tower remains the same regardless of token usage. ## Benefits {#mc-subscription-based-cost-for-ai-vendors__section_why} Token-based cost types don't reflect the actual spend for vendors that bill by seat. With the Subscription cost type, you enter the contract value once, and AI Control Tower applies the resulting monthly cost to each month of the contract period. The cost and value figures on your dashboards then match what your organization pays the vendor. ## When to configure subscription costs {#mc-subscription-based-cost-for-ai-vendors__section_when} The Subscription cost type is available when you add vendor costs during the cost configuration steps of AI Control Tower onboarding, also called the day zero experience. Configure subscription costs during onboarding, when you set up the rest of your AI cost configuration. You can update a subscription cost at any time after onboarding. Updates apply only from the next day onward. You can't change cost data for today or earlier dates. For details, see [Cost updates and calculation schedule](https://www.servicenow.com/docs/yoHsv8BG7bBzH1xu~ybzPQ "AI Control Tower preserves recorded cost data and calculates cost and value on a daily schedule. These rules determine when a cost change takes effect and when it appears in your dashboards."). ## Subscription cost components {#mc-subscription-based-cost-for-ai-vendors__section_components} A subscription cost consists of the following parts: Licensed seats and cost per seat : The number of seats in the contract and the price for each seat per month. Both values are required. Contract period : The contract start and end dates. AI Control Tower applies the monthly cost to each month from the contract start date until the contract end date. Both dates are required. One-time setup fee (optional) : A flat fee that some vendors charge for eligibility for seat-based pricing or discounted seat-based pricing. Organizations refer to this fee by different names, such as base license fee or one-time setup fee. For example, a vendor might require you to buy another subscription before it offers a discounted per-seat price. Amortization period : The number of months over which AI Control Tower spreads the one-time setup fee. The amortization period is populated by default from the contract start and end dates. You can override the default value. ## Monthly cost calculation {#mc-subscription-based-cost-for-ai-vendors__section_calculation} AI Control Tower calculates subscription costs monthly. The estimated monthly cost is the licensed seat cost plus the amortized setup fee, if configured: Estimated monthly cost = (licensed seats × monthly cost per seat) + (one-time setup fee ÷ amortization period) ## Example calculation {#mc-subscription-based-cost-for-ai-vendors__section_sjd_kwm_rkc} A contract includes 1,000 licensed seats at $25 per seat each month and a $20,000 one-time setup fee amortized over 14 months: * Monthly seat cost: 1,000 × $25 = $25,000 * Monthly amortized setup fee: $20,000 ÷ 14 = $1,428.57 * Estimated monthly cost: $25,000 + $1,428.57 = $26,428.57 {#mc-subscription-based-cost-for-ai-vendors__ul_tjd_kwm_rkc} **Related concepts** * [Cost updates and calculation schedule](https://www.servicenow.com/docs/yoHsv8BG7bBzH1xu~ybzPQ "AI Control Tower preserves recorded cost data and calculates cost and value on a daily schedule. These rules determine when a cost change takes effect and when it appears in your dashboards.") * [Cost configurations](https://www.servicenow.com/docs/GG5isGf3unlU9r3F91uVfA "Configure the hourly rates and vendor costs that AI Control Tower uses to calculate what your AI systems cost to run.")