If you have ZfS 2 Policy and Distribution Services installed on your network, you must use the Upgrade option to install ZfS 3 Policy and Distribution Services.
Server Inventory and Management and Monitoring Services are automatically upgraded when you install those components. However, the ZfS 2 Server Inventory database will not be migrated to ZfS 3. For Management and Monitoring Services, you will have the option to back up database files. You can perform alarms migration after completing the installation.
You can upgrade Policy and Distribution Services incrementally, so you can run ZfS 2 and ZfS 3 concurrently on your network. For more information, see "Upgrading to ZENworks for Servers 3" in the Installation guide.