I have moved your post in an unrelated forum to the DLO forum.
I doubt that DLO will work in workgroup environment.
Please see the requirements in the DLO Admin Guide:
Before You Install
Domains and Active Directory
The DLO Administration Server, DLO Dedupe Server, DLO Edge server, DLO IO Server and DLO Storage Locations must be in a Windows Domain or Active Directory.
Computers running the Desktop Agent can be outside a Windows Domain or Active Directory, but they must authenticate with the domain or directory to access the DLO Administration Server or Storage Locations.
Yes it will work
Just add manually the user name in DLO Gui
then add the user in Active Directory
When at DLO Agent prompt for credentials, give user name and password and In Domain tab write down the DOMAIN.COM (Your domain)
it will connect