Software Licenses

All software applications require a software license that describes how software can be used and distributed. Learn about the differences in licensing between proprietary and free and open source software.

Software Licenses

All software applications require a software license in order to run. A software license is a legal instrument that governs how the software can be used and distributed. When you download or install software, you are asked to agree to the terms of a license. If you are like most computer users, you probably don't read the entire license in any detail.

Software is generally copyright protected, unless it is specifically made available in the public domain. A typical license grants a user permission to use one or more copies of the software without copyright infringement.

A license does not mean you have to pay for the software - even free software is licensed. A license is simply the mechanism that authorizes you to use the software, separate from any fees you may need to pay to obtain a license. Commercial software is software that is produced for sale.

Software falls into two broad categories: proprietary software and open-source software. Each will be discussed in some detail.

Proprietary Software

Proprietary software consists of software that is licensed by the copyright holder under very specific conditions. In general, you can use the software, but you are not allowed to modify the software or distribute it to others.

The original source code for the software is not available, which means you can't see the actual code written by the programmers. Proprietary software is, therefore, also referred to as closed-source software. This is done on purpose to protect the intellectual property invested in software development. If the source code were released, even with copyright restrictions, competitors could benefit from using this code.

Many proprietary software applications are also commercial, meaning that you have to pay for a license. However, many other proprietary software applications are free. The fact that software is free does not mean it is not proprietary.

There are numerous examples of proprietary software. Both the Windows and Mac operating systems are proprietary, and so are many of the typical software applications used in organizations, such as Microsoft Office. Many specialized software applications, such as those used for database management and various types of enterprise information systems, are also proprietary. In many cases, software companies have invested many years of software development into a product. By making the software proprietary, they are protecting their investment and make it possible to commercialize their software. The revenue from software sales can then be used to continue developing the software.

Shareware is proprietary software that is made available to users at no cost under certain conditions. For example, shareware may have limited functionality relative to the commercial version of the same software, or the license for the software may expire after a certain trial period. The rationale behind shareware is to give potential users the chance to evaluate the software before investing in a license fee. Trial versions of commercial software fall under the shareware category.

Free and Open-Source Software

Open-source software, as the name suggests, is software for which the source code is released. This means that users can look at exactly how the software was created using one or more programming languages. This is done on purpose so that anyone can benefit from using the code. A typical license for open-source software gives users the right to modify and distribute the software.

Open-source software is typically free to use, which has led to the use of the term free and open-source software, or FOSS. This acronym is widely used, but many people use 'FOSS' and 'open-source software' interchangeably.

Open-source software is often developed in a collaborative manner, where many users contribute to ongoing improvements. Typically, a user community maintains a website where the latest version of the software can be obtained and where users can share ideas on how to use and improve the software.

The license for most open-source software uses what some have called copyleft. This is a play on the word 'copyright.' To understand what this means, it is worth considering how open-source software could be misused by someone. Consider that anybody can download, modify and distribute open-source software. What would stop a company from creating its own version of the software and then start selling it? That is where copyleft comes in. The license for open-source software specifically states that a user is not allowed to put restrictions on its use or distribution. So, by agreeing to the license, you can't start selling the software later.

Copyleft uses copyright law to make open-source software freely available to be modified, requiring that all modified and extended versions are to be free as well. The most widely used example of a copyleft license is the GNU Public License, or GPL. So when you look at software and you see that the license is GPL, this means the software is open source.

There are numerous examples of free and open-source software applications. One of the most successful examples is the Linux operating system. Linux is used by many organizations and has also resulted in numerous spinoff efforts. For example, the Android operating system used on mobile phones is based on Linux and is also free and open source.

Why Pay for Software?

Open-source software has become very popular. Think of any proprietary software application, and there is likely a free and open-source alternative that provides similar functionality. If so much software is free, why do organizations keep paying for commercial software? There are a number of reasons, but some of the key reasons are: