This refers to how many people are using the system at the exact same time, which is typically much less than the total number of users (i.e. named users) that will be using the system.
Think of it as you would your telephone lines. If you have 50 employees, you don’t need 50 phone lines because there will never be a time that everyone is talking at once.
We usually count on a concurrent user license for each of your “core” users (people who will be using the system all day long, like Buyers, Inventory Managers, etc.). However, for your “casual” (occasional) users like Requisitioners or Managers that are just approving orders, it’s typically a 10:1 ratio. For example, 5 concurrent licenses might support 40 or 50 casual users, since they will only use the system for a few minutes at a time, then they’ll log out.
That said, it really depends on your needs and the volume of orders. But don’t worry, you can always adjust your concurrent user license if you need to. More importantly, nothing bad will happen if you run out of licenses; if your license is full, the next user will just get a message to “try again later” (the equivalent of a busy signal if all the phone lines are busy).