Historically, this was the physical mechanism for mounting a processor chip on a motherboard of a computer: to protect the processor, a socket was first soldered to the motherboard, and then the chip was inserted into the socket, thereby avoiding the risk of heating the processor by soldering. Wave-flow soldering and other assembly techniques have made physical sockets (generally) obsolete for modern processors, and the term now refers to any place on a computer's mother board where a central processing unit can be inserted.

For licensing purposes, socket-based licensing is usually aimed at measuring the maximum power that the computer could have when fully configured. This means that it is not relevant to the license whether the socket is actually populated (has a processor chip mounted at this point or not), but simply that a CPU could be located here. If the license instead counts only those sockets that are actually populated with processors, consider using a processor-based license. For a license that insists on accounting for sockets (empty or not), such as some Oracle licenses, be aware that hardware inventory normally returns only the count of populated sockets (that is, of processors). If you need to account for empty sockets, you can manually modify the figures returned from inventory, and your changes are preserved through all future inventory collections.

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