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A software license that restricts use, modification, and redistribution, retaining control with the rights holder.
DESCRIPTION
Proprietary licenses grant limited rights to users under terms set by the software owner, typically prohibiting source code access and redistribution. They are often enforced via End User License Agreements (EULAs) and may include usage limits, maintenance terms, and audit rights. Organizations use proprietary licensing for commercial protection and monetization. Compliance involves tracking entitlements, versions, and usage across environments. In contrast, open source licenses grant broader freedoms to use, study, modify, and share.
ALTERNATIVE DEFINITIONS
Free Software Foundation
Proprietary software means software that does not respect users’ freedom and community.
Defines proprietary status via absence of essential freedoms.
Open Source Initiative
The Open Source Definition sets forth the criteria for an open-source license; licenses that do not meet these criteria are proprietary.
Contrasts proprietary licenses by exclusion from OSI criteria.
IBM
Proprietary software is software owned by an individual or company and licensed under terms that restrict use, modification, and sharing.
Emphasizes ownership and restrictions on modification and distribution.
RELATED TERMS
Copyleft EULA Closed Source GNU GPL Permissive License Intellectual Property License Compliance Software Distribution Commercial Software
COMPETING TERMS
KNOWLEDGE AREAS
Software Engineering Platform & Tooling Data Privacy & Compliance
TARGET AUDIENCE
Software Developer Chief Technology Officer IT Manager Application Administrator IT Auditor Chief Information Officer Chief Information Security Officer
EXTERNAL SOURCES
- Wikipedia - Proprietary software
- Free Software Foundation - FSF licensing resources and guidance
- Open Source Initiative - OSI approved licenses list
- Microsoft - Commercial licensing programs
TOP QUESTIONS
Why do companies use a Proprietary License?
It protects intellectual property and monetizes software through controlled distribution. Proprietary licensing enables support contracts, compliance audits, and tailored terms.
Category: Relevancy
What’s the biggest risk of a Proprietary License for users?
Vendor lock-in and limited flexibility can hinder integration. Audits and penalties may apply for non-compliance, creating financial and operational risks.
Category: Risks
How does a Proprietary License differ from open source?
Proprietary licenses restrict modification and sharing, whereas open source grants freedoms to use, study, modify, and redistribute under permissive or copyleft terms.
Category: Alternatives
What is commonly misunderstood about Proprietary Licenses?
Some assume proprietary equals higher security; security depends on practices, not license type. Others underestimate audit and compliance obligations.
Category: Misunderstanding
How are Proprietary Licenses managed in enterprises?
Using SAM tools, entitlement tracking, and procurement workflows. Regular audits ensure compliance, and legal teams negotiate terms with vendors.
Category: Management
Which clauses require attention in Proprietary Licenses?
Usage limits, audit rights, indemnity, warranties, termination, and transfer restrictions. Cloud terms include data handling and availability commitments.
Category: Requirements
What are examples of Proprietary License models?
Per-seat, per-core, subscription, and usage-based models are common. EULAs often accompany desktop software; enterprise suites use complex metrics.
Category: Example
When should open source be preferred over Proprietary License?
When flexibility, transparency, and community support are needed. Open source reduces lock-in and can accelerate innovation with broader ecosystem tooling.
Category: Opinion
Where to learn more about licensing choices?
Consult FSF and OSI resources, vendor licensing portals, and legal counsel. Case studies illustrate trade-offs across industries and scale.
Category: Example