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Also referred to as shadow-free or cloudy-day illumination these lights give surface illumination with no shadows, ideal for highly reflective surfaces or parts with surface variations. The concept is that lighting is applied from all angles onto the part with no strong direct source so everything reflects in all directions leaving no shadows. This is similar to the effect see on a cloudy day where the clouds diffuse the sunlight so you get an even light without any direct glare from the sun.
Lights are available in a large range of sizes, often the lights need to be considerably larger than the object they are illuminating to ensure that the light is coming from a similar distance from all directions rather than being too close around the outer edges. These lights are often best applied close to the object as if you move too high you get no shadow-free benefit (a diffuse area light would have a similar effect). Also due to the highly diffuse nature of these lights getting them close to the object retains as much brightness in the image as possible.