What is Proprietary Software? Features, Benefits, Types of Licensing, and the Future Ahead

|Updated at July 07, 2025

The global software industry is expected to reach $2,088.9 billion by 2035, growing rapidly each year. This shows how software powers the world—from websites of brands to managing finances to simply browsing the internet, the software models are accountable for everything we do. 

Talking about the types of software models, proprietary software is the top #1. If you are curious to learn about software models, dive into this blog. We will cover all about open source vs. proprietary software, the licensing, and applications here. So, read carefully and take notes!

What is Proprietary Software?

Proprietary software

This is a closed-source software program that is created and managed by an individual or an entity. These software products have source code developed by humans working behind the scenes, and they are the only ones with the sole authority to legally make changes, distribute the channels, and view the working mechanism. 

Unlike open-source software, which can be accessed and redistributed easily, these software programs are controlled by the proprietary, and users are asked to purchase the license. So, to get a Proprietary Software License, you have to follow the rules set by the owner, and voilà! Install and use it on your device. 

Here are the most popular examples of Proprietary License Software that have competitive features and are only accessible by licensing agreements:

  • Microsoft Windows
  • macOS
  • Adobe Photoshop
  • AutoCAD
  • Microsoft Office Suite

Now that you’re introduced to the program, let’s go ahead and understand its key characteristics in the next section. 

Characteristics of Proprietary Software

Knowing what is the proprietary software is a must before you dive into its unique characteristics. As you have a grasp on it, licensing, restricted usage, and control will make a lot more sense now. 

  • Source Code is Closed: The source code of these software programs isn’t accessible to the public, preventing users from altering or examining the software’s inner mechanisms.
  • Limitations in Licensing: Users are required to accept an End-User License Agreement (EULA) that specifies the permitted usage of the software. It also explains how redistribution or modification is not allowed, and any misbehavior will lead to account cancellation. 
  • Paid Subscription: The program is mostly available with a paid subscription for users. Even when they are available for free, the features are restricted, and their usage is limited. 
  • Proprietary Lock-in: These programs are managed by the owner; thus, their updates, assistance, and compatibility are decided by them. Moreover, closed-source programs are difficult to integrate with other software. 

Open Source Software Vs Proprietary Software

Proprietary software vs Open Source

Choosing software for yourself or your company is a big task. The debate always boils down to open source vs. proprietary software. While both of them are widely popular, but have their own set of functions, restrictions, and advantages. We have explained both the software here, so you can make strategic decisions based on all the factors. 

Features Open-Source Software Proprietary Software 
Source Code The access is freely available online. The access is restricted. 
Costing These programs are usually free or charge a small donation. These programs are typically paid or subscription-based. 
Customization and Integration  The customization and integration support opportunities are endless. The customization is limited, and integration is often not supported. 
Support They have an online community for support. The owners offer support to the customers. 
Innovation SpeedNew features are added because of collaborative innovations. The additions and updates are robust because of market competitiveness. 
Security Mechanism It is found openly, so it has more eyes. The security is strong under encryption and layering. 

To find out the right software for you from the open software vs. proprietary software debate, you must check out two points: a) costing and b) security. Other than that, every program in today’s time offers great features to compete in the market. 

Proprietary Software Vs Other Types of Software 

Well, this one always stays on top of the competition, but it is not the only option available in the market. There are plenty of other types you must know about: freeware, shareware, Public Domain Software, and more that make up a great alternative. 

Freeware 

These software programs are proprietary but are available for free. Users can easily install and freely access it on their devices; however, the distribution is prohibited, and the source code is shielded from the public. 

Freeware Software Examples: Skype, Adobe Acrobat Reader

Shareware 

These software programs are designed to be freely used on a trial basis. Note that the functionalities and features are limited for the free version. However, if the user likes its usage, they can choose to pay and use the software to its full extent. 

Shareware Examples: WinRAR and antivirus programs.

Freemium Software 

With these, you can get all the basic features for free, and the advanced features are hidden behind the paywall. Most of the mobile apps and SaaS platforms we follow are based on this model. 

Freemium Software Examples: Spotify, Dropbox, Zoom 

Public Domain Software 

These software programs do not have any ownership or copyright restrictions. One can use them freely, access them, and redistribute them freely; it does not require any legal permissions. 

Public Domain Software Examples: SQLite, VLC media player, and Moodle 

Each of these software types serves its purpose, and depending on your requirements, accessibility, and budget, you can choose the right one for you. 

Also Read: Divijos: Build and Manage Your Website with this Revolutionary Platform

Advantages of Proprietary License Software

As you already know, the meaning, and it is the top player in the software world. Take a look at its advantages, which explain why it is the best: 

Top-Notch Support and Maintenance: The majority of the software includes official assistance, updates, and maintenance provided by the vendor. This may be essential for businesses requiring dependable performance and technical support. Plus, it eases the load to fix the issues yourself. 

  • Intuitive Interface: These software programs are designed keeping the user experience in mind. They have powerful yet user-friendly interfaces that do not require much technical skill and can be handled by a wide user base. 
  • Security Mechanism: While the open-source software programs lack strong security protocols, these are designed with layers of encryption and strong cybersecurity protocols to shield the user’s data from risk. 
  • Upgrades and Performance: The companies are always on the lookout for innovation, and they bring new updates, cutting-edge features, and new tools from time to time. 

With regular updates and better customer support, your business can relax and simply utilize the features to their full extent. 

Disadvantages of Proprietary Software License

Though this software is the best, it does come with its own set of drawbacks and limitations, which you must know about: 

  • Lacks Transparency: As it is closed-source software, users do not know what happens behind the wall. So you can never fully comprehend its privacy, surveillance, and security functions. 
  • Costing: It is only accessible after licensing, which can break the budget of many users, especially for enterprise-level tools. On top of that, many subscription models by Adobe can even ask for extra charges to unlock other features. 
  • Customization is Limited: This software does not allow users to customize to any extent. This restricts users’ ability to integrate the software according to their needs. 

These are a few limitations of this software. If you can work with that, you’re good to go!

Types of Proprietary Software Licenses 

The major step in switching to proprietary software starts with choosing the right license. Licensing truly matters, not because of the compliance, but it also tells about the costs, flexibility, and scalability. So let’s understand the nuances of licensing here:

  • Single-User License: This allows the software programs to be accessed on a single device and can be used by a single person. These are best for individuals, a one-person company, and for personal purchases. 
  • Multi-User License: This allows multiple users within a company to use the software. The maximum number of users is defined by the vendor. These are best for small businesses and are cost-effective. 

Perpetual License: This license permits users to utilize the software for a lifetime following a single payment. The point to note is that it generally does not offer updates and assistance after a certain point in time.

Subscription License: These licenses are time-based. Meaning, the user can utilize the software freely for the time they have paid the subscription fees for. Once the payment period is over, the license is revoked. These software programs are always updated with the latest features and functionalities. 

Volume License: This type of licensing enables a business to activate several installations with one license key or agreement. It works best for large enterprises for streamlined deployment and management. 

These are the types of proprietary software licenses you will come across while purchasing one for yourself. Note that every user has their requirements, so knowing what your business needs will help you choose the right one and make the best of your software investment.  

The Future and Final Thoughts on Proprietary Software 

Proprietary software typically features closed-source code, but it often offers improved performance, robust security mechanisms, and a dedicated support team. This combination provides users with more control, stability, and strategic value. Whether you need the software for individual or enterprise-level usage, it offers regular upgrades and advancements and will continue to grow with you. 

Talking about its future, the proprietary software will remain the cornerstone for applications and innovations for the companies. Plus, going forward, you will see more licensing models to make it accessible on a budget, more focus on data security, AI advancements, and integration abilities. 

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Frequently Asked Questions 

Ans: Proprietary software is closed-source software owned and managed by an individual or a business entity. While its usage is easy, it prohibits distribution and duplication. 

Ans: The most popular proprietary examples are Microsoft Windows, Apple macOS, and Adobe Creative Cloud.

Ans: The most popularly used proprietary apps are Microsoft Word, Photoshop, Skype, AutoCAD, Spotify, and Zoom.

Ans: Yes, Windows 10 is a proprietary program by Microsoft. Even though it is accessible to the public, the licensing and restrictions are solely handled by the company. 

Ans: Yes, it is a proprietary program that is part of the Microsoft Office Suite, which allows distribution under a paid licensing agreement. 

Sources 

Proprietary Software – By Wikipedia

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