In order to run PowerFactory, a Licence Service that is called CodeMeter needs be installed on a Windows based machine (refer to this link for supported Operating Systems).

For Single-User Editions of PowerFactory, the Licence Service is installed automatically during the normal PowerFactory installation. In case of a softkey licence (more on softkeys at  this link) the machine on which PowerFactory is installed must not be a Virtual Machine (VM). If a Virtual Machine is needed then it is possible to choose a USB dongle licence instead. 

For Multi-User or Team Editions of PowerFactory, CodeMeter is automatically installed with every PowerFactory installation. The licence however resides on a different, central Licence Server. On the Licence Server you can install PowerFactory or (if PowerFactory operation is not needed at the server) it is sufficient to install the LicenceComponents (which include CodeMeter, the LicenceManager and the LicenceValidationService). The machine should ideally be a physical server running a Windows operating system (refer to the PowerFactory installation Manual for supported Operating Systems or directly request further information). If it is needed to be virtualized, then a USB Dongle licence is mandatory.

The LicenceManager application allows the user to manage the purchased licence(s). Using this application, the user can activate (using an activation code), update, select or deactivate owned licences. In order to facilitate the above actions, Internet access is needed (more info at this link). At periodical intervals licence checks are performed at PowerFactory startup (refer to this link for more information). In case of the Multi-User Editions the validation step can be performed by the LicenceValidationService installed with the LicenceComponents on the LicenceServer.

The licences themselves are contained either within a USB dongle or a softkey (a non-physical medium). Unless otherwise requested, a new licence is being provided based on a softkey. For details on the differences between softkey and USB dongle licences refer to this link .