At a very basic level, IBM i licensing is based on the hardware model, machine size (small, medium, and large), and processor groups. In general, one license or “entitlement” is required per processor core. Some IBM i models allow per user licenses to be used in addition to per processor licensing.
IBM i user entitlements
An IBM i user is a person who accesses the IBM i operating system through one or more connections. The user exchanges credentials (user identifications) either directly with the operating system, or indirectly through application or middleware software that is supported by the operating system. On system models that offer user entitlements, you must acquire entitlements for the maximum number of IBM i users who are authenticated on the system at the same time (concurrent IBM i users).
IBM i processor entitlements
In addition to licensing by the number of IBM i users, the operating system is also licensed by processor. Each IBM i model that offers user entitlements includes at least one IBM i processor entitlement. You might need to purchase additional processor entitlements to configure or run the operating system on additional processors.