Commercial software, or seldom payware, is a
computer software
Software is a set of computer programs and associated documentation and data. This is in contrast to hardware, from which the system is built and which actually performs the work.
At the lowest programming level, executable code consists ...
that is produced for
sale
Sale may refer to:
Common meanings
* Sales, the exchange of goods for profits
* Sales, discounts and allowances in the prices of goods
Places
*Sale, Victoria, a city in Australia
*Sale, Myanmar, a city
*Sale, Greater Manchester, a town in Engla ...
or that serves
commercial
Commercial may refer to:
* a dose of advertising conveyed through media (such as - for example - radio or television)
** Radio advertisement
** Television advertisement
* (adjective for:) commerce, a system of voluntary exchange of products and s ...
purposes. Commercial software can be
proprietary software
Proprietary software is computer software, software that is deemed within the free and open-source software to be non-free because its creator, publisher, or other rightsholder or rightsholder partner exercises a legal monopoly afforded by modern ...
or
free and open-source software
Free and open-source software (FOSS) is a term used to refer to groups of software consisting of both free software and open-source software where anyone is freely licensed to use, copy, study, and change the software in any way, and the source ...
.
Background and challenge
While
software
Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work.
...
creation by
programming is a time and labor-intensive process, comparable to the creation of physical
goods
In economics, goods are items that satisfy human wants
and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not ...
, the reproduction, duplication and sharing of software as
digital goods
Digital goods or e-goods are intangible goods that exist in digital form. Examples are Wikipedia articles; digital media, such as e-books, downloadable music, internet radio, internet television and streaming media; fonts, logos, photos and graph ...
is in comparison disproportionately easy. No special machines or expensive additional resources are required, unlike almost all physical goods and products. Once a software is created it can be copied in infinite numbers, for almost zero cost, by anyone. This made
commercialization
Commercialization or commercialisation is the process of introducing a new product or production method into commerce—making it available on the market. The term often connotes especially entry into the mass market (as opposed to entry into ...
of software for the
mass market
The term "mass market" refers to a market for goods produced on a large scale for a significant number of end consumers. The mass market differs from the niche market in that the former focuses on consumers with a wide variety of backgrounds wi ...
in the beginning of the
computing era impossible. Unlike hardware, it was not seen as trade-able and commercialize-able good. Software was plainly shared for free (
hacker culture
The hacker culture is a subculture of individuals who enjoy—often in collective effort—the intellectual challenge of creatively overcoming the limitations of software systems or electronic hardware (mostly digital electronics), to a ...
) or distributed
bundled with sold hardware, as part of the service to make the hardware usable for the customer.
Due to changes in the computer industry in the 1970s and 1980s, software slowly became a commercial good by itself. In 1969, IBM, under threat of
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
litigation, led the industry change by
starting to charge separately for (mainframe) software and services, and ceasing to supply source code. In 1983 binary software became copyrightable by the ''
Apple vs. Franklin'' law decision, before only source code was copyrightable.
Additionally, the growing availability of millions of computers based on the same
microprocessor
A microprocessor is a computer processor where the data processing logic and control is included on a single integrated circuit, or a small number of integrated circuits. The microprocessor contains the arithmetic, logic, and control circu ...
architecture created for the first time a compatible mass market worth and ready for binary
retail software
Retail software is computer software, typically installed on PC-type computers post 2005, delivered via the Internet (also known as cloud-based). Traditionally this software was delivered via physical data storage media sold to end consumer but ver ...
commercialization.
Commercialization models for software
Common business wisdom is that software as digital good can be commercialized to the mass-market most successful as