How do FlexNet floating licenses work

What happens when you use floating licenses and start the IBM® Rational® product that connects to the Rational License Key Server?

The Rational product uses the RATIONAL_LICENSE_FILE system variable to find out the FlexNet license server name and the port that the server is using.
The Rational product contacts the license manager on the FlexNet license server, using the specified port.
The Rational product requests a floating license and makes the request for the vendor daemon.
On the FlexNet license server, the license manager sends the request to the vendor daemon.
The vendor daemon checks if any licenses are available.
If there are available licenses, the vendor daemon grants a license and the Rational product runs.
If licenses are not available, the vendor daemon refuses the request. The Rational product fails to start and displays a message saying that it could not obtain a license.