License allocation is an accounting tool; it assigns licenses to devices, departments, sites, or cost centers to track license distribution and ownership. License compliance is an evaluation tool; it compares a product’s license quantities against its installation quantities to determine a compliance status.
With the exception that both are based on licensed products, license allocation and license compliance are independent of one another. Allocating licenses does not affect the number of purchased licenses or installations for a product, and therefore does not affect the license compliance status for the product.
For example, assume that DepartmentQ purchased 30 licenses of ProductA. However, DepartmentQ has 35 installations of the product, which means that the license compliance status for ProductA is undercompliant (too few licenses for the number of installations). You decide to allocate 35 licenses to DepartmentQ, which you can do even though you only have 30 purchased licenses. The compliance status remains undercompliant because the purchased licenses, not the allocated licenses, are used when calculating compliance.
In some instances, license allocations might help you resolve compliance problems. For example, you notice that Product A is undercompliant by four licenses. You check the license allocation information for Product A and see that 14 licenses are allocated to DepartmentQ and 14 devices associated with DepartmentQ have Product A installed. At the same time, you see that 12 licenses are allocated to DepartmentZ but 16 devices associated with DepartmentZ have Product A installed. You know that you need to work with DepartmentZ to resolve the compliance problem.