Software licensing is commonly ignored but most important part of software engineering. Licensing defines the way how the users can use the particular software. . This document tries to explain the software licensing in abstract way including most of the common terms every IT personals must know.

What is software licensing ?

  • Agreement or contract between software publisher and end user
  • Also called EULA (End user license agreement)
  • Protects copyright by placing restriction in use of software
  • Restrictions like duplication , modification , Using for other purpose , Redistribution etc.
  • Restricts reverse engineering and piracy
  • kind of disclaimer and it approves that publisher is not liable for any kind of harm from software
  • Some use shrinkwrap as license acceptance some as clickwrap
  • Shrinkwrap is like forceful licensing ,If seal broken Non returnable
  • Invalid licensing
  • In Clickwrap ,license embeded in software itself , User can abort installation if he doesn’t agree
    with terms
  • Many types of licensing
  • Freeware is less restrictive as compared to shareware/Retail softwares
  • Shareware gives freedom to unlimited download but restrict the modification in software
  • in public domain license , No restriction is posed , All products belongs to public not a particular vendor

Types of licensing:

  • Licensing is a legally binding agreement which specifies the term of use of application and defines right of software producer and end user
  • All software must be legally licensed before installation
  • 3 types

a) Based on mode of contract

  • Negotiable
  • Non-negotiable
  • Shrink wrap
  • Click Wrap

b) Based on relation between parties

  • Developer publisher
  • Publisher distributor

c) Based on freedom of use

  • Proprietary
  • Free license
  • Open source license
  • Workstation
  • Perpetual
  • Non perpetual
  • Site license
  • Concurrent use
  • License with maintenance

a. Proprietary License :

  • Most software’s are proprietary
  • Publisher grants one/more copies to the user but ownership of these copies remains to publisher
  • user must accept license before using
  • Most restrictive form of license
  • User have no right to modify , copy , Redistribute
  • All right to copyright holder , limited right to users
  • closed source
  • May be free or paid
  • eg: Microsoft windows , Adobe Photoshop , Maya , FIFA , GTA vice city etc.

b. Free/Open source license(mainly GNU GPL but other too):

  • More freedom than proprietary
  • No copyright laws
  • Matter of freedom instead price
  • Ownership not limited to publisher
  • Less restrictive
  • license do’not restrict users from use in any way
  • Mostly free
  • Credit must given to original developer if modified
  • No personal ownership
  • Anyone can modify source code

2 Types of Open Source License:
Copyleft and permissive free software license


  • Defines free and open source licensing guidelines
  • May change source code but refinement must be licensed under GNUGPL
  • eg: hami vlc media player ko code edit garera Different version banayera distribute garna
    sakchhau , but license chai gnuGPL mai garnupar6
  • also called free/copyleft license
  • May be free or paid
  • GNU : Gnu’s not Unix , Founder Richard Stallman
  • Linux , VLC etc are licensed under GNU GPL

Workstation License:

  • Permits installation of application in single PC
  • You may not install app on more machine until purchasing license for each machine
  • user can make backup of software only for recovery

Concurrent Use license:

  • You can use in multiple PC as long as it doesn’t exceed number of license which u have purchased
  • used in license manager

Site license:

  • only for use in particular sites like school,university,Research center etc.

Perpetual license:

  • License without expiration
  • No need to pay fees
  • Forever license

Non-Perpetual License:

  • Lease software for particular period of time
  • It may be annual,bi-annual
  • If date ceased , need to pay fee
  • Software must removed after date

License with Maintenance:

  • Must purchase Maintenance with software
  • pay assurance fee with license fee

Based on Mode of contract:

  • Negotiable : Both parties negotiate to make valid contract
  • Non-negotiable : Predefined terms and condition
  • Shrink-wrap : Software bundled with plastic seal
  • Click-wrap: EULA embedded in Software itself

Based on Relation between parties:

  • Developer-publisher: Negotiation between developer and publisher , about royalty issues
  • Publisher-distributor: Where to distribute , How to distribute , About profit sharing

Thanks for reading this article. Hopefully you get to know about different terms involving in software licensing. Please do not forgot to leave your thoughts in comment section below. Thank You.

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