Say we are looking at EDA applications (i.e. Mentor Graphics), they request a feature / license from centralized licenses server. Vendor daemon see if you are allowed to obtain one.
The idea is that these floating licenses can serve a greater number of staff. You may have purchased 100 licenses, but you have 150 staff (typically, we usually see that ratio – 2/3).
FlexLM / FlexNet is the most popular, but we also serve a great number of other licenses. We also support many other license types – you can view the full list here.