I'm using a licensed API which has a method to acquire/release a license object from a license server that has a finite number of licenses. At the beginning of my application, I call the method to acquire the license, but I want to make sure that this gets released even if my program terminates/crashes abruptly (exceptions, SIGTERM, etc). Is the shutdown hook the best way to approach this issue?
@thedan is correct about hard JVM crashes. If a JVM crashes hard or it gets a SIGKILL, it won't get a chance to run anything before exiting. There is nothing you can do to remedy this in Java in that scenario. (But the situation is the same in other languages too ...)
However if the JVM does an orderly shutdown in response to all non-dameon threads ending, calling System.exit(), getting a SIGINT and so on, then the JVM will attempt to run the shutdown hooks. There is more information on Java's shutdown hook mechanisms in the Q&A page and the javadocs.
The finally approach is also an option, but is only works if the thread in question is terminated before the JVM exits. This won't happen if System.exit() is called or the JVM is terminated by a signal. Shutdown hooks work in more situations.
(To my mind, finally is really for performing clean on a single thread rather than for the entire application. However if your application consists of just one thread ... or if it has a master thread that is responsible for orderly shutdown ...then finally can serve the purpose of application cleanup.)
The real solution is to configure the licensed API so that the license manager can detect when the application instance using a license goes away without releasing it. Whether this is possible depends on the license manager.