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I don't understand what a server license is. Please explain.

Typically a server license is either needed when running a server-type-application, or when providing applets and comparable things on a website. So if you develop programs that are (a) provided to client computers (e.g. applet) and the number of client computers cannot be determined or (b) on a server (servlet), you need a server-license. However, when running your software as a service ("SaaS" model) you will need runtime licenses, depending on the number of users subscribed to your service.