Proprietary Software

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.

Proprietary software is primarily commercial software that can be bought, leased or licensed from its vendor/developer. In general, proprietary software doesn't provide end users or subscribers with access to its source code. It can be purchased or licensed for a fee, but relicensing, distribution or copying is prohibited. Most software is proprietary software and is produced by an independent software vendor (ISV). The restrictions or conditions imposed by the vendor/developer on proprietary software is elaborated within the software's end-user license agreement (EULA), terms of service agreement (TOS) or other related use agreements. The user/organization must accept the agreement prior to installing or using the software. The software developer/vendor can take legal action against the end-user/organization for violating the EULA or TOS.

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.