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I am currently moving our old jira to a new server with an upgraded version of jira and restoring the data from the previous server on it. Do I have to upgrade my license in order for it to work? And if I upgrade my license, will it disable to old instance, thereby preventing me from using the old instance as a backup in case the new one doesnt work properly?
If you upgrade JIRA, you need a valid licence to for this instance. So if you bough a licence some years back, you can't not install new upgraded Jira for this version.
To restore data from old instance I recomend install same version on new instance, restore data and make a upgrade.
@charles moore Welcome to the Atlassian Community
If you have a valid Jira server license then you will be able to create a new instance using that license. I would suggest using the developers license that is available to setup the server and test everything before backing up and restoring the old server to the new one. Then when the new server is ready you can decommission the old server and update the new server with your production license.