Table of Contents
If software is proprietary, it means its source code is kept secret. The source code reveals how the product works, so by concealing it, developers prevent users from tampering with the product and competitors from stealing the ideas behind the source code and using it as inspiration for their own products. Source code is a software owner’s “trade secret” if you like, and it’s essential to keep under wraps as it’s difficult to patent.
It’s therefore subject to copyright laws, and only the author or owner has control over its development, just like with any other product. Producing proprietary software provides a clear business model – the owners sell their product and make money.
Explaining Proprietary Software in Detail
Proprietary software is software that legally remains the property of its creator, whether that’s an individual, an organisation or a company. That means they own all rights to the product, including the intellectual property rights to the source code: the code that makes the program run.
The source code is effectively the building blocks of the software. It’s the human-readable version of the software, usually written in a higher-level programming language. When developers or coders read the source code, it tells them how the software works and how they can program the computer to perform different functions.
The availability of this source code provides the fundamental difference between open source and proprietary software. With opensource software, users are allowed to inspect the source code, study it, modify it and redistribute it. With proprietary software, only the creators can see the source code, meaning it is only the creators who fully understand how it works, who can make changes to the code and distribute it on. For these reasons, proprietary software is sometimes known as closed source software.
Proprietary software has existed since the 1970s, but it wasn’t always possible to create a business out of selling software. Software started out outside the laws of copyright when developers would share updates and bug fixes. Since software became subject to copyright, it has left developers and users divided between two camps: whether software should be developing using the opensource model or the proprietary model.
Control, Protection and Exclusive Rights
Vendors can restrict several factors when they sell software. They exercise exclusive rights over the terms and conditions of use and redistribution. Vendors can limit the following:
- Use of software – Vendors tend to limit the number of computers on which their software can be used. They can enforce this by using product activation, a product key or serial number or copy protection.
- Inspection and modification of source code – In the vast majority of cases, proprietary software vendors don’t release the source code. Occasionally, they will release the source code to users who have purchased a license, but only with a non-disclosure agreement, which allows the user to study and modify the source code but not redistribute it, nor redistribute their modified versions.
- Limited License – Most vendors prohibit users from sharing the software with other entities. Each party using the software requires a unique license.
- Compatibility with other software – Most proprietary software stores its data in specific file formats and communicates in certain protocols which are incompatible with those of other types of software.
- Hardware use – Some licensing terms stipulate that the software may only be used on a specific set of hardware. Such is the case for Apple, which limits the macOS operating system to use on Apple hardware. This license is reinforced practically by specific design features that make it incompatible with other hardware.
Positives for Developers & Developers
The proprietary model attracts a lot of developers, primarily because they get to commercialise their products. But there can be perks for proprietary software users, too. Here are some of the benefits to the closed source model:
- Money – The most obvious factor where developers are concerned is that creating proprietary software means they can make money. How else do you make money being a software developer? Developing a proprietary software solution provides a logical business plan. You spend time developing a product worth buying and sell it. Take Microsoft, for example. This tech giant has built an empire by producing copyrighted software – the bulk of its revenue comes from selling Windows and Microsoft Office. Microsoft is now worth over $1 trillion. For budding software developers, going proprietary is the obvious choice.
- Product stability – As open source software is continually evolving and developing, users have no control over how it develops. For users who aren’t looking to develop or modify the software, a proprietary solution represents far more stability. If you’re going to run your entire business out of proprietary software, it’s good to be safe in the knowledge that your software solution is stable.
- A clearer roadmap – Any business needs clear direction. When a developer or organisation produces commercial software, part of their business model includes a plan for the development and evolution of the product. The aim is to create a sustainable product with paid upgrades along the way. It’s far easier to establish a direction and vision for how a project will develop when it’s only you and your team who have a say.
- Tailored Reliable Support – For the user, paying for a product means better customer service. Closed source vendors spend significant time and money fine-tuning specific products. Typically, closed source software has fewer functions and a narrower application, meaning training and after-sale support is more complete, accessible and effective.
- Easier to use – Another perk for the user is improved overall user experience. Again, commercial vendors rely on you choosing their solutions over the number of free, open source alternatives on the market. User interfaces are therefore usually sleeker, and general usability is often of a higher standard in a closed source product. Proprietary products are also typically designed for a smaller range of uses. As the focus of the software is narrower, so is the target the market. Vendors, therefore, put time and money into creating a product that aligns with expectations of their end-users.
Negatives for Developers & Developers
Some developers begrudge the proprietary model. Closed source software means that only the owner or employees of the owner can work on it, which removes the collaborative nature of open source software.
- User dependency – As proprietary software is privately-owned, it means you have no control over the lifespan of the product. If you’ve based all your business operations on a piece of proprietary software and the company decides to discontinue it, there’s nothing you can do about it. – Users are at the mercy of their software suppliers in terms of updates, too, relying on them for bug fixes and improvements. If your vendor decides to take a product in a direction which doesn’t suit your company, there’s little you can do to stop them, unless you’re their number one customer. And once you’ve embedded their software in your enterprise, it can be far too costly to change it, meaning you’re pretty locked in.
- Bulky products – Another disadvantage of closed source products is that they tend to be heavy on your computer system. Microsoft Office, for example, installs a lot of components that most employees don’t need, such as Publisher or Access. It can be confusing to remove programmes from your computer, or only download what you need, leading most people to blindly install a huge package. On the flip side, many open source software is rooted online and takes up only a small amount of space, which can make it a better option for some users with limited computer storage.
- Less flexibility – Proprietary software is often a rigid, finished product, created for specific purposes. As such, it can be difficult to tailor the software to your particular company needs or customise the software if this isn’t already an option.
- Surprise costs – Not only does proprietary software (usually) cost money, which not all open source software does, but on top of the initial costs, there may be a whole host of extra fees of which you weren’t aware at the time of purchase. As well as monthly or yearly fees, prices can increase on renewal, and there can be other hidden costs which are hard to spot when considering the initial plan.
- Licensing headaches – Big companies that use proprietary software need to take care when it comes to their licensing arrangement. Working out a licensing plan with Microsoft is very different for large corporations than it is for individuals purchasing Microsoft Office. Enterprises employ experts whose entire job role is to stay on top of their firm’s licensing arrangement with the tech giants like Microsoft. Not only is it expensive to hire a person for this sole function, but if you do breach a license, you can incur significant fines.
Final thoughts + FAQ’s
Proprietary software might be a more expensive option, but it’s one that could save you money, time and resources down the line. These products are professional-grade and designed with the end-user – that’s you! – in mind.
That said, it’s worth weighing up the pros and cons of closed source software before you reach a decision. Do a little market research, and see what open source software alternatives are available, and how much technical skill you would need to implement and maintain it. Ultimately, it’s a choice between reliability and stability against adaptability and flexibility.
If you’re looking for a ready made solution for straightforward uses, then consider going with proprietary software, which comes up trumps for usability and customer service. Still have questions, find answers to frequently asked questions below.
- Is proprietary software the same as commercial software? – These two terms are often used interchangeably and are often synonymous. Commercial software, occasionally known as payware, is computer software specifically produce for sale or commercial purposes. As most proprietary software is sold or created for this purpose, there’s a lot of crossover. However, not all commercial software is proprietary – some remains open source, although this is far less common.
- What is a shrink-wrap license? – A shrink-wrap license is a form of end-user license agreement (EULA). It comes with software when it’s enclosed in plastic-wrapped packaging and dictates the type of license the user holds and what they can and cannot do with the software. A shrink-wrap agreement is deemed to come into effect once the end-user opens the packaging. This kind of arrangement is controversial, as it means users can’t see the agreement before they’ve purchased it. To resolve this problem, some manufacturers use an onscreen EULA instead. The user must agree to the user agreement on the screen before they can continue with the installation. A EULA of this kind is sometimes known as a clickwrap agreement.
- Do governments use proprietary software? – The opacity of proprietary software means that some governments fear trusting software which could compromise sensitive information if they included malicious elements or defects. In 2003, Microsoft launched a Government Security Program, where governments were allowed to view the source code as well as Microsoft’s security documentation, intended to address the increased security requirements for government bodies. One of the first governments to come on board with the program was the Chinese government in 2003, after meeting with Bill Gates. Now over 45 governments participate in the scheme.
- What is shareware? – Shareware refers to proprietary software which is available to users for free under certain conditions. Software owners who distribute shareware often also have a commercial version of the same product, in which case the shareware would have limited functions compared with the paid version. Other shareware might represent the full paid product, but has a very limited period of use, as is the case with many free trials. The idea behind shareware is to give users a chance to test out the product before they invest in a license.
