Floating licensing is a software licensing approach in which a limited number of licenses for a software application are shared among a larger number of users over time. When an authorized user wishes to run the application they request a license from a central license server. If a license is available the license server allows the application to run. When they finish using the application, or when the allowed license period expires, the license is reclaimed by the license server and made available to other authorized users.

The license server can manage licenses over a local area network

Local area network

A local area network is a computer network that interconnects computers in a limited area such as a home, school, computer laboratory, or office building...

, an intranet

Intranet

An intranet is a computer network that uses Internet Protocol technology to securely share any part of an organization's information or network operating system within that organization. The term is used in contrast to internet, a network between organizations, and instead refers to a network...

 or virtual private network

Virtual private network

A virtual private network is a network that uses primarily public telecommunication infrastructure, such as the Internet, to provide remote offices or traveling users access to a central organizational network....

, or the Internet

Internet

The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

.

Floating licensing, also sometimes known as concurrent licensing or network licensing, is often used for high-value applications in corporate environments, such as electronic design automation

Electronic design automation

Electronic design automation is a category of software tools for designing electronic systems such as printed circuit boards and integrated circuits...

or engineering tools.

The history of software licensing

• Licenses were fixed to a particular CPU.
• Prices of software licenses increased as the computer's performance increase.
• Limiting the number of copies of software made to disk or tape was important.
• Software is a network resource--licenses "float" on the network.
• Software costs are a function of how many users simultaneously run the software.
• Value exists in the use of software, not in the number of copies on disk or tape.