According to the EULA, you can run Analog Factory on only one machine, and you don't need any hardware dongle to strictly operate it.
But, if you want to use it on several computers (one at a time) the license must be stored on an external device, allowing this particular comfort of use. Even, this prevents any license loss in case of hard drive crash, or simple system failure.
So, to sum-up:
_ to use Analog Factory on 1 computer, you don't need any USB-eLicenser hardware dongle.
_ to use Analog Factory on 2 or more computers, you need a USB-eLicenser hardware dongle.