Software Licensing
Author profile - Aakanksha-Chetan-Patel
Aakanksha Patel
March 20, 2022

Everything you need to know about Software Licensing

Softwares has become the lifeblood of modern businesses in today's IT-driven world. A plethora of software/tools are utilized in business organizations to carry out a plethora of tasks efficiently. 

The use of these tools helps eliminate human error, cut down IT costs and significantly improve business organizations' operations. But how much do we really know about the software that we use daily?

Over the years of providing multiple services of IT Infrastructure Management in Ahmedabad, we have come across many business owners who know very little about the software they operate daily. Therefore, we have taken this initiative to educate our readers about one of the most important components of business software management, i.e., software licensing.

Read on to know in detail what software licensing is and how it can help your business carry out IT operations optimally. 

Software Licensing - A Comprehensive Guide 

First things first, let us understand what software licensing is exactly. In simple terms, It is a legal agreement between the software owner and the end-users, outlining how the digital product can be utilized and distributed.

It is a detailed document outlining the responsibilities and rights of each party involved, protecting the owners from infringement of copyright. Generally, it includes specifics like - 

  • User permission to view underlying source code.
  • Whether or not the user can copy, alter, or redistribute the software
  • Where the program should be installed and how many times

Whenever an individual or organization purchases software, they are legally bound to agree to the terms and conditions of the software license. Failure to purchase a licensed software or non-compliance with its terms can lead to software audits by the vendors and even hefty fines. 

Let us know to understand what particulars are typically mentioned in a software license. 

What Does A Software License Contain?

Primarily, a software license document contains these four major components - 

 General Information

The general information section defines the type of agreement between owners and users established with the purchase of software. It clears out when the arrangement will go into effect and how long it will be active.

List Of Involved Parties

This part of the agreement provides details about all the parties/ organizations entering the contract. It may include specific particulars about the individuals or companies involved like - 

  • Full Name.
  • Contact Details. 
  • Registered Address.

Terms & Conditions

This is the most crucial section of the software license and includes vital information about aspects like - 

  • Price - The total price and payment terms, i.e., whether it is a one-time fee or an annual fee. 
  • Access to the coding.
  • Whether it can be used on multiple devices/locations or not.
  • Support, maintenance, and refunds details 

Additional Details

Any terms unique to your program or situation that aren't covered elsewhere in the contract will be mentioned in this contract section. Signatures, dates, and a statement regarding any notarization requirement etc can all be added to this area.

Software Licensing comes in multiple varieties, varying in usage and software type. The most common types of software license include - 

Five Types Of Software Licenses Every Business Owner Should Know About 

1. Public Domain

This is the least restrictive type of software license, allowing the users to modify and use the software without any restrictions. However, since anyone can use them, this software is comparatively less secure than others. 

Therefore, you should always check its security before adding it to your codebase. 

2. Permissive 

Commonly known as 'Apache style' or 'BSD style,' the permissive licenses contain minimal restrictions on software usage. There are no strict restrictions on how the software can be used, redistributed, or modified in this contract. 

It is perhaps the most widely used license, making it ideal for several business owners. 


The Lesser General Public License is a license that permits users to link open-source libraries in your software. 

By simply compiling an LGPL licensed software with your code, you can release your software under any license. However, if you partially copy the terms in your code or modify the library, you may need to release your application under the terms of the LGPL license.

4. Copyleft

These are known as restrictive or reciprocal licenses. Copyleft license code allows you to update the code and release new work based on it, given that the new wor or adaptations are under the same software license.

For example, If the copyleft license specifies that the work is free to use and distribute for personal use only, any derivative produced using that license will be restricted to personal use only. (Any new program you create that contains the component is referred to as a derivative.)

5 Proprietary

Amongst all license types, the proprietary license is the most restrictive one. All rights are reserved under this licensing agreement, which means that the software's codebase, content, and other components cannot be modified or redistributed.

Signing Off! 

With this knowledge, you can now understand the importance of software licensing and determine which software license type will best meet your requirement. This will help you make an informed choice and gain optimally from your software purchase.   

For more information on software licenses and to ensure you are always compliant with the latest Software licensing requirements, we recommend hiring an expert specializing in IT Infrastructure Management in Ahmedabad.