Methods and systems are disclosed for managing software licenses in a distributed computer network. The number of software licenses allocated to software users can be determined on a node-by-node basis in realtime with little or no additional processing overhead incurred by the network. Upon of the occurrence of a node failure, software licenses are efficiently reallocated to new users. In one implementation, users are periodically counted at each network node and transmitted to a master node with a sanity scan result message. A license allocation condition is periodically evaluated using the sum of the counts. If the condition is met, a license lockout can be performed upon the expiration of a grace period.