In high transaction CRM system, it is often possible that two users are working on same record and updating record at the same time. This might result in data loss. For example, you opened a contact record and trying to update Mobile number for that contact. At the same time, another user opened record and trying to update Last Name. Suppose they both clicked the save button at almost same time. What will happen? The update request which reaches later will be the end result of data. So the first update request will get lost.
To avoid these kind of scenarios Microsoft introduced Optimistic Concurrency with CRM 2015 Online Update 1. This feature is not yet available for CRM on premise.
How to enable Concurrency Behavior for Entities: