What Is Proprietary Software?

July 9, 2024

Proprietary software, also known as closed-source software, is software that is privately owned and restricted by its creator or publisher. The source code of proprietary software is not shared with the public, meaning users cannot view, modify, or distribute it.

what is a proprietary software

What Is Proprietary Software?

Proprietary software, also known as closed-source software, refers to software that is owned by an individual or a company and is subject to licensing agreements that restrict its use, modification, and distribution. Unlike open-source software, the source code of proprietary software is not made available to the public. This means that users cannot view, modify, or share the underlying code.

Proprietary software is typically sold commercially, and users must purchase a license to use it. The terms of the license often include restrictions on how the software can be used, such as limiting the number of installations or the types of devices on which it can be run.

Additionally, proprietary software usually comes with customer support, regular updates, and patches provided by the software developer or vendor. These updates are often essential for maintaining the software's functionality and security. However, the closed nature of proprietary software means that users are dependent on the developer for these updates and for fixing any bugs or vulnerabilities. The control over the software remains entirely with the owner, which can lead to limitations in customization and higher costs compared to open-source alternatives.

Proprietary Software Examples

Proprietary software is owned by an individual or company and is not available for public modification or distribution. Users must typically purchase licenses to use proprietary software, which often includes restrictions on how the software can be used. Here are some examples of proprietary software and explanations of their functionalities:

  • Microsoft Windows. Microsoft Windows is one of the most widely used operating systems for personal computers. It provides a graphical user interface (GUI), virtual memory management, multitasking, and support for many peripheral devices. Windows offers a range of versions tailored for different uses, from home computing to professional and enterprise environments.
  • Adobe Photoshop. Adobe Photoshop is a leading software for image editing and graphic design. It offers an array of tools for photo retouching, image composition, and graphic creation, making it a standard in industries such as photography, design, and digital art. Its proprietary nature ensures that users receive frequent updates and professional support.
  • Microsoft Office Suite. Microsoft Office is a suite of productivity applications, including Word, Excel, PowerPoint, and Outlook. These tools are essential for tasks such as document creation, data analysis, presentations, and email management. The suite is known for its integration across applications and with cloud services like OneDrive.
  • Apple macOS. macOS is the proprietary operating system for Apple's Macintosh computers. Known for its sleek design and robust performance, macOS offers seamless integration with other Apple products and services, such as iCloud. It also supports a wide range of software applications tailored for creative professionals.
  • AutoCAD. AutoCAD, developed by Autodesk, is a leading software application for computer-aided design (CAD) and drafting. It is widely used in architecture, engineering, and construction to create 2D and 3D drawings. AutoCAD’s proprietary nature ensures regular updates, professional support, and extensive documentation.
  • Oracle database. Oracle Database is a powerful and widely used relational database management system (RDBMS). It supports complex transactions, high availability, and robust security features, making it a preferred choice for enterprises managing large volumes of data and requiring high reliability.
  • MATLAB. MATLAB is a proprietary high-level programming language and interactive environment used primarily by engineers and scientists. It offers tools for numerical computation, data analysis, visualization, and algorithm development. Its users have access to extensive toolboxes and professional support.

History of Proprietary Software

The history of proprietary software began in the early days of computing when software was typically bundled with hardware and not considered a separate commodity. In the 1960s and 1970s, as computers became more widespread, software development became a distinct industry. Companies like IBM initially provided software as part of their hardware sales, but as the industry evolved, the value of software as an independent product became clear.

By the late 1970s and early 1980s, the rise of personal computers spurred the growth of the software industry. Companies like Microsoft and Apple emerged, focusing on developing proprietary software for their hardware. Microsoft's MS-DOS and later Windows operating systems became dominant in the PC market, while Apple developed its proprietary macOS for its Macintosh computers. These companies adopted a business model that restricted access to their source code, requiring users to purchase licenses to use their software.

The 1980s and 1990s saw an explosion of proprietary software applications across various domains, including productivity (e.g., Microsoft Office), graphics (e.g., Adobe Photoshop), and databases (e.g., Oracle). This period marked the establishment of proprietary software as a major industry, with companies investing heavily in research and development to create advanced and feature-rich applications.

Despite the dominance of proprietary software, the late 1990s and early 2000s saw the rise of the open-source movement, which advocated for freely accessible and modifiable software. Nevertheless, proprietary software remained prevalent, especially in enterprise environments, due to its professional support, regular updates, and comprehensive features.

Today, proprietary software continues to be a cornerstone of the software industry, coexisting with open-source alternatives. Companies like Microsoft, Adobe, and Oracle maintain their leading positions by continuously innovating and providing robust support and services to their users.

Proprietary Software License Types

Proprietary software licenses govern how software can be used, modified, and distributed. Here are some common types of proprietary software licenses and their explanations:

  • End user license agreement (EULA). EULAs are legal contracts between the software developer and the user. They define how the software can be used, including restrictions on copying, modifying, and redistributing the software. EULAs often include clauses about liability, warranty disclaimers, and terms of service.
  • Perpetual license. A perpetual license allows users to purchase the software once and use it indefinitely. However, this does not usually include ongoing support, updates, or new versions, which may require separate maintenance fees or subscriptions.
  • Subscription license. Subscription licenses require users to pay a recurring fee (monthly or annually) to use the software. This model often includes access to updates, new features, and support services as long as the subscription is active.
  • Concurrent use license. Concurrent use licenses allow a set number of users to access the software simultaneously. This type of license is useful for organizations with many employees who do not all need to use the software at the same time.
  • Site license. A site license permits an organization to use the software on an unlimited number of computers within a specific location. This is cost-effective for large organizations needing to deploy software across many machines in one site.
  • Network license. Network licenses allow the software to be used on any machine connected to a specific network. These licenses are managed by a central server that controls access, making it easier to manage software deployment in large organizations.
  • Proprietary freeware license. This license allows users to use the software for free but does not grant access to the source code or allow modification. Freeware is often used to promote other paid products or services offered by the developer.
  • Trialware or shareware license.  Trialware or shareware licenses allow users to try the software for a limited time or with limited features. After the trial period, users must purchase a license to continue using the software or to access the full functionality.

Proprietary Software Advantages and Disadvantages

When evaluating proprietary software, it's important to consider both its advantages and disadvantages. Proprietary software, developed and owned by a specific company, offers benefits such as dedicated support, regular updates, and robust security measures. However, it also comes with limitations, including higher costs, restricted customization, and dependency on the vendor for updates and issue resolutions.


Proprietary software offers several key advantages that make it a popular choice for many users and organizations. Here are some of the main benefits:

  • Professional support. Proprietary software typically includes access to professional support services. This means users can rely on dedicated technical support teams to help resolve issues, provide guidance, and ensure the software runs smoothly.
  • Regular updates and patches. Developers of proprietary software regularly release updates and patches to improve functionality, fix bugs, and enhance security. These updates are often automatically provided to users, ensuring that the software remains current and secure against the latest threats.
  • Comprehensive documentation. Proprietary software often comes with extensive documentation, including user manuals, tutorials, and knowledge bases. Documentation helps users understand how to effectively use the software and troubleshoot common issues.
  • Enhanced security. Proprietary software vendors invest heavily in security measures to protect their software from vulnerabilities and attacks. This includes regular security audits, encryption, and other safeguards to protect user data and ensure compliance with industry standards.
  • Advanced features and functionality. Proprietary software is often designed with advanced features and functionalities that cater to specific user needs. This can include specialized tools, other software integrations, and capabilities not commonly found in open-source alternatives.
  • Ease of use. Proprietary software is generally designed with user-friendliness in mind, featuring intuitive interfaces and user experiences. This can reduce the learning curve for new users and improve overall productivity.
  • Accountability and liability. With proprietary software, the vendor is accountable for the performance and reliability of the software. This means users can expect a certain level of quality and can seek redress if the software fails to meet its promised capabilities.


Here are some key drawbacks of proprietary software:

  • Higher costs. Proprietary software requires purchasing licenses, which can be expensive. Additionally, there may be recurring fees for updates, support, and maintenance.
  • Limited customization. Users typically cannot access or modify the source code, limiting their ability to tailor the software to specific needs or preferences. This can be a significant drawback for organizations requiring specialized functionality.
  • Vendor lock-in. Users may become dependent on a single vendor for updates, support, and compatible software, making it difficult and costly to switch to alternatives.
  • Slower innovation. Proprietary software development is controlled by the vendor, which can slow down the implementation of new features or improvements compared to open-source alternatives that benefit from broader community contributions.
  • Privacy concerns. Proprietary software often collects user data for various purposes, such as improving services or targeting ads. Users have limited control over what data is collected and how it is used, raising privacy concerns.
  • Compatibility issues. Proprietary software may not always be compatible with other software or systems, especially those from different vendors. This can lead to integration challenges and additional costs for compatible solutions.
  • Limited support for older versions. Vendors may discontinue support for older versions of their software, forcing users to upgrade to newer versions, which can be costly and require significant time and effort.
  • Security risks. While proprietary software often includes robust security measures, it also creates a single point of failure. If a security vulnerability is discovered, users are dependent on the vendor to provide a timely fix. Additionally, the lack of transparency can make it difficult to assess the software's security posture independently.

Proprietary Software vs. Other Types of Software

When choosing software, it's essential to understand the differences between proprietary software and other types of software, such as open-source and free software.

Proprietary Software vs. Open-Source Software

Proprietary software and open-source software represent two distinct approaches to software development and distribution.

Proprietary software is developed and controlled by a specific company, requiring users to purchase licenses and adhere to usage restrictions, often offering dedicated support and regular updates but at a higher cost and with limited customization options.

Open-source software is collaboratively developed, with its source code freely available for anyone to view, modify, and distribute. This fosters innovation and customization, as users can tailor the software to their specific needs, usually at no cost. However, open-source software may lack formal support and rely on community-driven assistance instead.

The choice between proprietary and open-source software depends on the user's priorities, whether they value control and customization or prefer the reliability and support offered by proprietary solutions.

Proprietary Software vs. Freeware

Proprietary software is usually sold under a license that requires payment and restricts how the software can be used, modified, and distributed. Users must purchase licenses and may incur additional costs for updates and support.

Freeware, on the other hand, is available at no cost to the user, but like proprietary software, it typically does not allow modification or redistribution of the source code. While proprietary software often comes with professional support and more robust features, freeware provides a cost-effective solution for users who need basic functionality without financial investment, though it may lack the extensive support and advanced features of proprietary alternatives.

Proprietary Software vs. Shareware

Proprietary software is fully licensed and typically requires users to purchase a license upfront, granting access to the software with full functionality and often including support and updates.

In contrast, shareware is a type of software distributed for free on a trial basis, allowing users to test it with limited features or for a limited time before purchasing a full license.

While proprietary software ensures a committed investment in a fully functional product with professional support, shareware provides an opportunity to evaluate the software's usefulness and suitability before making a financial commitment, though it may come with fewer guarantees of support and updates during the trial period.

Proprietary Software vs. Abandonware

Proprietary software and abandonware represent two distinct categories of software with notable differences.

Proprietary software is actively maintained and supported by its owner or developer, who restricts access to the source code and requires users to purchase licenses for usage. This type of software typically includes regular updates, security patches, and customer support.

Abandonware refers to software that is no longer maintained or supported by its creator, often due to the company going out of business or the product being discontinued. While abandonware might still be accessible and usable, it lacks official updates, support, and might pose security risks due to outdated code and unaddressed vulnerabilities. Users of abandonware often rely on unofficial patches or community support, and legal issues can arise from using or distributing software that is still under copyright protection.

Anastazija is an experienced content writer with knowledge and passion for cloud computing, information technology, and online security. At phoenixNAP, she focuses on answering burning questions about ensuring data robustness and security for all participants in the digital landscape.