A central license manager is installed on one machine on your network. The central license manager controls access for all the ArcGIS software products on the network.
The license server can be either a UNIX or Windows server and will manage both UNIX and Windows ArcGIS products. For example, a Windows installation of ArcGIS 8.1 can obtain a license from either a Windows or UNIX 8.x license manager.
Choose a stable machine that is permanently on your network. Try to avoid a machine that is frequently rebooted or taken off the network. A license server does not necessarily have to be a high-end machine; reliability is far more important.