The number of licenses you purchase determines the number of people who can use the software simultaneously. The license manager keeps track of the available licenses. Once a user starts ArcEditor on that machine, the license manager checks out a seat license. When the user exits ArcEditor, the license is checked back in. ESRI provides a Desktop Administrator tool for controlling which software is operational on that machine and listing additional concurrent use licenses available on the network.
Users can easily switch between software depending on their role or daily tasks.