Software is not sold, it is licensed. A license grants the end-user a “right to use” the software on a given server. A license is needed for every server where the software is installed and for every user that can access it.

Two types of license exist; a "User" and a "CPU" license.

1. User Licenses. A "User" license creates a finite pool of available connections between every user’s workstation and the server. The size of this pool is defined by the number of connections purchased, which is encrypted in the key and verified by the license manager. Each open or active window within the application consumes one of these connections, so decreasing the "available count" in the pool by one. Only active (read simultaneous) users consume connections.
   
   Depending on how the application is written, a user may consume multiple connections if multiple active windows are open. Each active window requires a connection. For the most part, the number of "users" equals the number of "connections", but it is recommended to budget for a greater number, if multiple windows are commonplace throughout the application.
   
   When the pool of connections is exhausted, a message will appear blocking access to new users. If this occurs frequently, it is recommended to purchase more users and add them to the license.
    
2. CPU Licenses. A "CPU" license creates an infinite pool of available connections. The number of physical CPUs must match the number encrypted in the license however; otherwise the license manager will reduce the size of the pool to the number of CPUs in the server multiplied by 100. If for example, a server has 32 CPUs and the license is only for 16, then the available pool will be 1,600 connections.

A dual-core server is considered as a single "CPU". A quadri-core server is considered as a dual core and so on. This is a commercial arrangement however; the number of CPUs corresponding to the physical configuration must be ordered, otherwise they will not be encrypted in the license. The order value will be adjusted by the sales administrator to reflect the commercial arrangement.

Yes. A web service consumes connections in the same way that users do, with one notable difference. On reaching the available limit in the pool, web services are queued rather than blocked as with users. The greater the number of connections in the pool, the greater the web service throughput.  Budgeting web services can be something of a black art and it is recommended to opt for CPU pricing.