We have GCP on demand instances, we need secured SMT servers for patching
I'm not sure what the question here is. On Demand instances launched in GCE should register to the SMT/RMT servers automatically. One of the only things that would stop this from happening would be a networking issue. Please look at /var/log/cloudregister for more information
Ya as they are under production environment, based on company security policy servers will not be able to reach google SMT servers. So we want to setup secured SMT servers in out organization.
If that is your requirement you will want to switch to BYOS. This will get you registration codes to run your own update servers. That's the only way.
Is there any alternate way? can we use our on-prem license to setup smt server on cloud?
Yes, if you have licenses from SUSE you can use them with BYOS images in the cloud. You can build RMT or SUSE Manager servers in your VPC. Alternatively, If you are routing traffic to your DC you can also run RMT or SUSE Manager servers there. There are several options when using BYOS.