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A node-locked licensing scheme is illustrated below.
For network licensing, LM-X additionally requires an external license server. The license server is software that is typically set up as a service (on Windows systems) or a daemon (on Unix systems) on the end user's network. The license server handles requests from users on a network to use the application, keeps track of floating licenses, and ensures there is no license overuse.
LM-X will check for a valid license file on the license server before granting permission to run the application. Periodic heartbeats occur between the license server and protected applications in the manner you specify (see Heartbeats). LM-X handles all the communication, based on TCP/IP protocol, which is transparent in the end users' network.
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