# What are the 2 categories of Software licenses?

- Link: https://technotaught.com/what-are-the-2-categories-of-software-licenses/
- Published: 2022-07-24T04:00:00+05:30
- Author: Prasant Vishwakarma

Software licensing is one of the most important parts of any developer team who 
works with generating new software. By licensing software, an author essentially
protects the software from being misused against the author’s wishes and the company
that has developed the software. 

![What are the 2 categories of Software licenses?](https://technotaught.com/wp-content/
uploads/2022/07/software-license.jpg)

A license also allows the users to use the software with the appropriate permissions
legally and within the norms of the license agreement. For companies that have multiple
licenses for various software, [license management software](https://www.openlm.com/)
helps in keeping track of these licenses procured can be quite tricky. 

Misusing a license agreement is a punishable offense; therefore, it is important
to document all the software licenses. A license management software helps organize
and manage licenses as per the requirement of the firm and allows the usage of the
software as per the agreed clause between the author, the user, and the company 
that owns it. 

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### **What is Software Licensing?**

When a company develops software, it is licensed by the author and the company so
that the software can be limited for its usage by other people. Instead, a company
invests much of its resources to develop a source code for a software program that
is used to develop many kinds of electronic and electrical devices such as phones,
household machines, automobile consoles, and other such devices. 

Software Licensing allows the company to hold the permissions and the required grants
for the usage of the software by other users. The benefits of software licensing
help in the following things such as:

 * Limits the number of software downloads
 * Limits the usage of source code
 * Allows access to specific parts of the code
 * Limits the right to edit or modify the code for new programs

Licenses are a way to generate revenue for software development companies as these
licenses are sold at a price to other users and, therefore, can help in creating
a stream of revenue for every subsequent usage. 

Licensed software comes with an activation key or a product key that helps authenticate
and validate the software users. Each software license sold can also be tracked 
using the keys used by the users or purchasers of the software. 

### **Types of Software Licenses**

Below are the 2 most common categories of software licenses in the market:

##### 1. **Open Source Software License**

Open Source Software License allows people to freely access the source code of the
software and use it as per the access provided. Public Domain licenses and LGPL 
licenses are types of Open source licenses that users can freely download and use.

GPL or copyleft licenses also allow for users to use software, but as long as the
credits are still mentioned for the original author or company. Modifications are,
however, restricted when it comes to Copyleft licenses.

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##### 2. **Commercial Software License**

Commercial Software licenses are less permissive and therefore have rights of usage
that the company reserves. Proprietary software is commercial software licenses.
Modified GPL licenses also fall under this category partially. 

These licenses charge a certain amount to use the software and therefore have certain
rights that are allowed for usage and certain limitations. They can be purchased,
however, by large companies and managed using **license management software**. 

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