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What Is Proprietary Software?

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Many of the systems and applications programs used today are proprietary software. This means that someone owns the rights to the program, and the owner expects users to buy their own copies. Microsoft Office is a typical example. If you want to acquire this software to write letters or produce graphics, you must purchase a registered copy in a store, through a mail order house, or over the internet. In buying the software, you pay not to own it, but to acquire a license that makes you an authorized user. Organizations such as businesses and schools, which may need software for use by several people, generally acquire site licenses that allow access by multiple users.

If you buy a copy of Microsoft Office for your own use, you cannot legally make copies of it for your friends, nor can you reproduce parts of the packages 's code to build your own suite program. You cannot eve rent or lease the software to others. You have bought only the right to operate the software yourself and for its intended use creating documents. Parts of the price that you pay for the program becomes profit for the software publisher Microsoft Cooperation for its effort in bringing the product to the marketplace.
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Until the late 1960 s computers—huge and expensive mainframe machines in specially air-conditioned computer rooms—were usually supplied on a lease rather than purchase basis.[5][6] Service and all software available were usually supplied by manufacturers without separate charge until 1969. Software source code was usually provided. Users who developed software often made it available, without charge. Customers who purchased expensive mainframe hardware did not pay separately for software.

In 1969, IBM, under threat of antitrust litigation, led an industry change by starting to charge separately for (mainframe) software[7][8] and services, by unbundeling hardware and software.[9]

Bill Gates' "Open Letter to Hobbyists" in 1976 is another cited key event in the rise of software commercialization.[10]

According to Brewster Kahle the legal characteristic of software changed also due to the U.S. Copyright Act of 1976.[11]

Starting in February 1983 IBM adopted an "object-code-only" model for a growing list of their software and stopped shipping source code.[12][13]

In 1983 binary software became also became able to be copy-righted by the Apple vs. Franklin law decision,[14] before that only source code was copyrightable.[15] Additionally, the growing availability of millions of computers based on the same microprocessor architecture created for the first time an unfragmented and big enough market for binary distributed software.[15]

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