Proprietary Software Definition

Proprietary software is software that is owned by an individual or a company (usually the one that developed it). There are almost always major restrictions on its use, and its source code is almost always kept secret.

Source code is the form in which a program is originally written by a human using a programming language and prior to being converted to machine code which is directly readable by a computer's CPU (central processing unit). It is necessary to have the source code in order to be able to modify or improve a program.

Software that is not proprietary includes free software and public domain software. Free software, which is generally the same as open source software, is available at no cost to everyone, and it can be used by anyone for any purpose and with only very minimal restrictions.

These restrictions vary somewhat according to the license, but a typical requirement is that they include a copy of the original license. The most commonly used license, the GNU Public License (GPL), additionally requires that if a modified version of the software is distributed, the source code for such modified version must be made freely available. The best known example of software licensed under the GPL is Linux.

Public domain software is software that has been donated to the public domain by its copyright holder. Thus it is no longer copyrighted. Consequently, such software is completely free and can be used by anybody for any purpose without restriction.

Freeware, not to be confused with free software, is a type of proprietary software that is offered for use free of monetary charges. However, as is the case with other types of proprietary software, there are generally severe restrictions on its use and the source code is kept secret. Examples of freeware include Adobe's Acrobat Reader and Microsoft's Internet Explorer web browser.

The restrictions on the use of proprietary software are usually enumerated in the end user license agreements (EULAs) that users must consent to. For software provided by large companies, EULAs are generally long and complex contracts. Among the most common of the prohibitions for such programs are making unauthorized copies, using it on more than a certain number of computers and reverse engineering it.

Some Unix-like operating systems are also proprietary. Among the most popular are AIX (developed by IBM), HP-UX (developed by Hewlett-Packard), QNX (developed by QNX Software Systems) and Solaris (developed by Sun Microsystems). Others are free software, including Linux and the BSD systems (the most widely used of which is FreeBSD).

Virtually all Microsoft software is proprietary, including the Windows family of operating systems and Microsoft Office. This includes software that is given away at no charge, such as Internet Explorer. Other major producers of proprietary software include Adobe, Borland, IBM, Macromedia, Sun Microsystems and Oracle.

In the early days of computing, software was generally free, and it was something that was shared among researchers and developers, who were usually eager to improve it. However, that situation changed as computers became more common, and the production of proprietary software became an excellent business model for many companies. However, in recent years some companies have begun to realize that free software can also be highly profitable. The most outstanding example of this is IBM, which continues to reap high returns from its approximately one billion dollar investment in Linux.

Some industry observers think that the role of proprietary software will decrease in the future because of the growing competition from free software. This view holds that free software will eventually come to dominate operating systems and major application programs. Proprietary software will remain strong in some niche markets, mainly for business and technical applications for which the demand is relatively small or specialized and for which users will be willing to pay relatively high prices.

The term proprietary is derived from the Latin word proprietas meaning property.

Created March, 2004. Updated July 3, 2005.
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