The iLok is a special USB device that holds your licenses for iLok-enabled software. Software publishers use the iLok to provide secure protection for their software. When you run their iLok-enabled software, it looks for the software license on your attached iLok. The Third Generation iLok is fully compatible with software created for the second generation iLok. With its smaller form factor and metal body, it is more robust and less prone to casual damage.