Network License Manager (NLM) runs on one or more servers in your network to control the distribution of licenses from the available pool. When a user starts a product, NLM requests a license from the license server. If a license is available, NLM assigns it to the requesting user. This assigned license is subtracted from the number of available licenses on the license server. When the user exits the product, NLM makes the license available again.
Cascading
NLM uses a process called cascading, in which NLM automatically switches or substitutes licenses according to a ranking hierarchy. Lower-ranking licenses are used whenever possible. Thus, multi-user licenses for a product are consumed first, then perpetual and maintenance plan licenses, and finally, the license of suites that include that product. Higher-ranking licenses are used only when necessary. For example, they are necessary when a user is running two or more suite products, or when all lower-ranking licenses are in use. During this process, NLM surveys license usage every two minutes. As it surveys, it redistributes licenses among users and retrieves licenses that have been unused for longer than the allowed timeout period.
License cascading is most effective in a large user group when NLM has a pool of different license types available for distribution. For example, suppose that the pool includes product-specific licenses for several products, licenses for a Standard tier suite, and licenses for an Ultimate tier suite. In this case, NLM has many options for determining the most efficient way to manage the licenses. If a user runs multiple products, NLM can assign single-product licenses as individual products start up and replace them with a suite license. If a user is performing a task that requires an Ultimate Suite product, NLM can also upgrade a Standard Suite license to an Ultimate Suite license.
You can disable cascading for product releases of 2016 and later. You do so by setting the value of the environment variable ADSK_CASCADING_OVERRIDE to 0 (a setting of 1 enables cascading). This setting applies across all products.
Options File
Although an options file is not required, you can use one to further control how NLM manages your network licenses. The options file is a simple text file in which you code parameters to control timeout periods, licensing borrowing, and other license-distribution factors.