The network licenses are hosted on a server. This server needs to be accessible to all workstations that will need access to the network licensing.
On this server the FlexLM software will be installed. There are three key pieces to the FlexLM (license manager): the lmgrd.exe, the vendor daemon (ideate.exe), and the license file (*.lic). These items are accessed using the utility LMTools.exe which provides a user interface for setting up the license manager.
When the license manager starts, the lmgrd.exe calls to the vendor daemon, which in turns calls to the encrypted license file. The vendor daemon then decrypts the license file and sends information back to the lmgrd. The lmgrd then creates a service running on the server using the name specified in LMTools. This service communicates with the workstations using a pair of random free TCP ports unless configured otherwise (see more here).
The software is installed on the workstations, and the licensing type is set to network. When the software is launched it checks the server(s) listed in the licensing window for a service that is distributing licenses. When it finds the service, it requests the appropriate license for the software that was opened. The service verifies that a license is available and then gives out the license. It decreases the available license pool by one. This is recorded in the service log file as the license going OUT.
While the software is open it will check to verify that the issued license is still available on the server. This happens every fifteen minutes. If the license is not available (because the license service is down or the connection to the server was lost), then the software will throw a licensing error. Otherwise, the license is retained until the software is closed. At that point it communicates with the licensing service and returns the license. This is recorded in the service log file as the license going IN and the number of licenses in the pool increase by one.
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