Proprietary software or closed source software is computer software licensed under exclusive legal right of the copyright holder with the intent that the licensee is given the right to use the software only under certain conditions, and restricted from other uses, such as modification, sharing, studying, redistribution, or reverse engineering. Usually the source code of proprietary software is not made available.
Until the late 1960s computers—huge and expensive mainframe machines in specially air-conditioned computer rooms—were usually supplied on a lease rather than purchase basis. Service and all software available were usually supplied by manufacturers without separate charge until 1969. Software source code was usually provided. Users who developed software often made it available, without charge. Customers who purchased expensive mainframe hardware did not pay separately for software.
Some vendors say that software licensing is not a sale, and that limitations of copyright like the first-sale doctrine do not apply. The EULA for Microsoft Windows states that the software is licensed, not sold.
By withholding source code, the software producer prevents the user from understanding how the software works and from changing how it works. This practice is denounced by some critics, who argue that users should be able to study and change the software they use, for example, to remove secret or malicious features, or look for security vulnerabilities. Richard Stallman, founder of the Free Software Foundation, says that proprietary software commonly contains "malicious features, such as spying on the users, restricting the users, back doors, and imposed upgrades." Some proprietary software vendors say that retaining the source code makes their software more secure, because the widely available code for open-source software makes it easier to identify security vulnerabilities. Open source proponents pejoratively call this security through obscurity, and say that wide availability results in increased scrutiny of the source code, making open source software more secure.
While most proprietary software is closed-source, some vendors distribute the source code or otherwise make it available to customers. For example, users who have purchased a license for the Internet forum software vBulletin can modify the source for his or her own site but cannot redistribute it. This is true for many web applications, which must be in source code form when being run by a web server. The source code is covered by a non-disclosure agreement or a license that allows, for example, study and modification, but not redistribution. The text-based email client Pine and certain implementations of Secure Shell are distributed with proprietary licenses that make the source code available.
Some governments fear that proprietary software may include defects or malicious features which would compromise sensitive information. In 2003 Microsoft established a Government Security Program (GSP) to allow governments to view source code and Microsoft security documentation, of which the Chinese government was an early participant. The program is part of Microsoft's broader Shared Source Initiative which provides source code access for some products. The Reference Source License (Ms-RSL) and Limited Public License (Ms-LPL) are proprietary software licenses where the source code is made available.
Governments have also been accused of adding such malware to software themselves. According to documents released by Edward Snowden, the NSA has used covert partnerships with software companies to make commercial encryption software exploitable to eavesdropping, or to insert backdoors.
Proprietary software vendors can prohibit users from sharing the software with others. Another unique license is required for another party to use the software.
In the case of proprietary software with source code available, the vendor may also prohibit customers from distributing their modifications to the source code.
Shareware is closed-source software whose owner encourages redistribution at no cost, but which the user sometimes must pay to use after a trial period. The fee usually allows use by a single user or computer. In some cases, software features are restricted during or after the trial period, a practice sometimes called crippleware.
The European Commission, in its March 24, 2004 decision on Microsoft's business practices, quotes, in paragraph 463, Microsoft general manager for C++ development Aaron Contorer as stating in a February 21, 1997 internal Microsoft memo drafted for Bill Gates:
The Windows API is so broad, so deep, and so functional that most ISVs would be crazy not to use it. And it is so deeply embedded in the source code of many Windows apps that there is a huge switching cost to using a different operating system instead.
Early versions of the iPhone SDK were covered by a non-disclosure agreement. The agreement forbade independent developers from discussing the content of the interfaces. Apple discontinued the NDA in October 2008.
A dependency on the future versions and upgrades for a proprietary software package can create vendor lock-in, entrenching a monopoly position.
Software limited to certain hardware configurations
Proprietary software may also have licensing terms that limit the usage of that software to a specific set of hardware. Apple has such a licensing model for Mac OS X, an operating system which is limited to Apple hardware, both by licensing and various design decisions. This licensing model has been affirmed by the United States Court of Appeals.
Proprietary software which is no longer marketed by its owner and is used without permission by users is called abandonware and may include source code. Some abandonware have the source code released to the public domain either by its author or copyright holder and is therefore free software, and no longer proprietary software.
If the proprietor of a software package should cease to exist, or decide to cease or limit production or support for a proprietary software package, recipients and users of the package may have no recourse if problems are found with the software. Proprietors can fail to improve and support software because of business problems. When no other vendor can provide support for the software, the ending of support for older or existing versions of a software package may be done to force users to upgrade and pay for newer versions; or migrate to either competing systems with longer support life cycles or to FOSS-based systems.
Proprietary software is not synonymous with commercial software, though the industry commonly confuses the term, as does the free software community. Proprietary software can be distributed at no cost or for a fee, and free software can be distributed at no cost or for a fee. The difference is that whether or not proprietary software can be distributed, and what the fee would be, is at the proprietor's discretion. With free software, anyone who has a copy can decide whether, and how much, to charge for a copy or related services.
Proprietary software that comes for no cost is called freeware.
Proponents of commercial proprietary software argue that requiring users to pay for software as a product increases funding or time available for the research and development of software. For example, Microsoft says that per-copy fees maximise the profitability of software development.
Proprietary software generally creates greater commercial activity over free software, especially in regard to market revenues.
The term "non-free" is often used by Debian developers to describe any software whose license does not comply with Debian Free Software Guidelines, and they use "proprietary software" specifically for non-free software that provides no source code.
A related concept is closed platform or "walled garden". The term "silo" is used to describe the even broader notion of "closed habitats that serve as private marketplaces that lock customers in and competitors out".
Software distributions considered as proprietary may in fact incorporate a "mixed source" model including both free and non-free software in the same distribution. Most if not all so-called proprietary UNIX distributions are mixed source software, bundling open source components like BIND, Sendmail, X Window System, DHCP, and others along with a purely proprietary kernel and system utilities.
Some free software packages are also simultaneously available under proprietary terms. Examples include MySQL, Sendmail and ssh. The original copyright holders for a work of free software, even copyleft free software, can use dual-licensing to allow themselves or others to redistribute proprietary versions. Non-copyleft free software (i.e. software distributed under a permissive free software license or released to the public domain) allows anyone to make proprietary redistributions. Free software that depends on proprietary software is considered "trapped" by the Free Software Foundation. This includes software written only for Microsoft Windows, or software that could only run on Java, before it became free software.
Some closed-source software was formerly open-source, but most of those kinds are usually still free-of-charge to download. A famous example of such is the Doom source portZDaemon which was prone to aimbot cheaters.
^Paul E.Ceruzzi (2003). A history of modern computing. MIT Press. p. 128. ISBN0-262-53203-4. "Although IBM agreed to sell its machines as part of a Consent Decree effective January 1956, leasing continued to be its preferred way of doing business"|accessdate= requires |url= (help)
^"History of Leasing". leasegenie.com. Retrieved 2010-11-12. "In the 1960s, IBM and Xerox recognized that substantial sums could be made from the financing of their equipment. The leasing of computer and office equipment that occurred then was a significant contribution to leasings growth, since many companies were exposed to equipment leasing for the first time when they leased such equipment"[dead link]
^"http://www-03.ibm.com/ibm/history/history/decade_1960.html". IBM. Retrieved 2010-11-12. "Rather than offer hardware, services and software exclusively in packages, marketers "unbundled" the components and offered them for sale individually. Unbundling gave birth to the multibillion-dollar software and services industries, of which IBM is today a world leader"
^Daniel A. Tysver (2008-11-23). "Why Protect Software Through Patents". Bitlaw.com. Retrieved 2009-06-03. "In connection with software, an issued patent may prevent others from utilizing a certain algorithm (such as the GIF image compression algorithm) without permission, or may prevent others from creating software programs that perform a function in a certain way. In connection with computer software, copyright law can be used to prevent the total duplication of a software program, as well as the copying of a portion of software code."
^Donovan, S. (1994). "Patent, copyright and trade secret protection for software". Potentials, IEEE13 (3): 20. doi:10.1109/45.310923. "Essentially there are only three ways to protect computer software under the law: patent it, register a copyright for it, or keep it as a trade secret."
^Eben Moglen (2005-02-12). "Why the FSF gets copyright assignments from contributors". Retrieved 2009-06-26. "Under US copyright law, which is the law under which most free software programs have historically been first published, [...] only the copyright holder or someone having assignment of the copyright can enforce the license."
^Microsoft Corporation (2005-04-01). "End-User License Agreement for Microsoft Software: Microsoft Windows XP Professional Edition Service Pack 2" (PDF). p. Page 1. Retrieved 2009-04-29. "You may install, use, access, display and run one copy of the Software on a single computer, such as a workstation, terminal or other device (“Workstation Computer”). The Software may not be used by more than two (2) processors at any one time on any single Workstation Computer. ... You may permit a maximum of ten (10) computers or other electronic devices (each a 'Device') to connect to the Workstation Computer to utilize one or more of the following services of the Software: File Services, Print Services, Internet Information Services, Internet Connection Sharing and telephony services."
^Margolis, Philip E. (1999). Webster's Computer & Internet Dictionary. Random House. p. 452. ISBN0-375-70351-9. "[P]roprietary is the opposite of open. A proprietary design or technique is one that is owned by a company. It also implies that the company has not divulged specifications that would allow other companies to duplicate the product."
^The Linux Information Project (2006-04-29). "Vendor Lock-in Definition". Retrieved 2009-06-11. "Vendor lock-in, or just lock-in, is the situation in which customers are dependent on a single manufacturer or supplier for some product [...] This dependency is typically a result of standards that are controlled by the vendor [...] It can grant the vendor some extent of monopoly power [...] The best way for an organization to avoid becoming a victim of vendor lock-in is to use products that conform to free, industry-wide standards. Free standards are those that can be used by anyone and are not controlled by a single company. In the case of computers, this can usually be accomplished by using free software rather than proprietary software (i.e., commercial software)."
^Havoc Pennington (2008-03-02). "Debian Tutorial". Retrieved 2009-06-04. "It is important to distinguish commercial software from proprietary software. Proprietary software is non-free software, while commercial software is software sold for money."
^Michael K. Johnson (1996-09-01). "Licenses and Copyright". Retrieved 2009-06-16. "If you program for Linux, you do need to understand licensing, no matter if you are writing free software or commercial software."
^Eric S. Raymond (2003-12-29). "Proprietary, Jargon File". Retrieved 2009-06-12. "Proprietary software should be distinguished from commercial software. It is possible for software to be commercial [...] without being proprietary. The reverse is also possible, for example in binary-only freeware."
^Engelfriet, Arnoud (August–September 2006). "The best of both worlds". Intellectual Asset Management (IAM) (New Hibernia House, Winchester Walk, London Bridge, London SE1 9AG, United Kingdom: Gavin Stewart) (19). Retrieved 2008-05-19.