An example method of entity lifecycle management in a service monitoring system includes: receiving, by a software application of a service monitoring system, a policy definition specifying an entity lifecycle management policy, wherein the entity lifecycle management policy defines management rules for a plurality of entities in the network environment, wherein each entity of the plurality of entities is represented by one of: a device, an application, a service, or a user account; identifying, by applying the entity lifecycle management policy to a plurality of active entities, one or more candidate entities for retirement; identifying, as retired entities, at least a subset of the one or more candidate entities; and excluding the retired entities from the plurality of active entities, thus preventing the retired entities from interacting with other components of the service monitoring system.