Freeware, Shareware, and Commercial Software – What’s the Difference

by Anna Khrupa on Jul 11, 2022

There are three main categories of software: freeware, shareware, and commercial. Most programs on the Internet are distributed either as freeware or shareware and seem to be free of charge and distribution restrictions. But not everything is as simple as it seems. Turns out, there is a huge difference between these three types of software and the way they are presented on the market. Let’s start with freeware first.

So, what is the meaning of freeware and how is it distributed?

What Is Freeware?

Freeware is a type of software that comes with permission to be redistributed but not modified and with no source code accessible. It refers to a closed type of software and is often adopted by companies to collect data, promote premium versions, and increase market share. The package comes either cost-free or with an optional fee. Some restrictions may be applied, but in general, it is offered for an unlimited time of use. It is great for smaller companies or companies with a tight budget. Freeware programs (e.g. Skype) have copyright laws that prevent users from modifying the code. Do they have something in common with free software? No.

Let’s find out what is freeware compared to free software?

Why Freeware Is Not Free Software

The main differences are copyright laws and costs. Free software is free of copyright laws, whereas freeware is free of cost. A free program has no limitations, but it is not free in terms of the price attached to it. It can be adjusted or repurposed completely by a user. The data is 100% available. Freeware may also provide source code publicity or be partially restrictive. But that is not necessarily. 

In free software, you can:

  • use software for different purposes;
  • learn and upgrade software to meet your needs;
  • share software with other users;
  • make changes and introduce improvements to others so they can benefit from the renewed software as well.

In freeware, the creators are the only ones who can or cannot allow more access or modifications to their software. They can hide the source code or put some restrictions on it for specific environments. In other words, freeware is free of charge but not free of use, which is always restricted by the creator.

And now let’s have a look at what is shareware in software.

What Is Shareware?

Shareware is proprietary software that is distributed free on a trial basis with a further payment for continued support and updates. This means a user might need to invest later. Often, there is a built-in expiration date for free use, which is commonly a 15-30-day trial period after which the users who do not pay have no access to the program. Or there is a limited in-built set of features provided for free with the ability to buy a complete version if desired. Or there is a full package of features that may be offered to users for a certain period only. Redistribution is possible but with a required license fee.

The shareware package suggests a paid version after a free trial period, which can be canceled before the trial period is over. It is not free or semi-free software because the source code is not available, which means it does not allow additional modifications, and there is no permission to make a copy or install it without the license fee. 

Shareware is popular with users because it allows them to try a program before buying it. The idea behind is that people are ready to pay for the product they like if they are asked to. The most popular examples of shareware are Photoshop and WinZip.​​

Types of Shareware

There are a few variants of shareware available.

  • Adware software makes different types of advertisements (usually relevant ones) displayed on a user’s computer.
  • Crippleware (Crippled software) has a disabled set of crucial features and services until users unlock access to them by going through a registration process.
  • Donationware is a type of software that comes for free but with the request of making an optional donation to the creator or a third-party organization.
  • Freemium (free and premium) software offers a basic set of functionalities for free and a premium set of functionalities for a subscription fee.
  • Nagware is a sort of software that reminds a user to upgrade or buy a premium version repetitively. It is a nagging reminder to register for an additional fee.
  • Trialware (or demoware) provides a program that is the same as the original one but which is limited in one way or another. For example, a program that has a limited number of features (3 features out of 10 are available) or a program that operates for a certain period before it expires.

What does shareware mean compared to freeware? Let’s figure it out.

The Difference between Shareware and Freeware

According to the freeware and shareware definition, the main distinction is the way these two are used. They work differently.

Freeware is available for unlimited usage without charge, with all of the rights retained to the program and the distribution controlled by the developer. Sophisticated services and premium packages are for additional fee.

Shareware encourages users to share the limited edition of the program. It may be copied for others to test the program out before buying it. Free use is restricted, but free distribution is eligible. Freeware can be downloaded with all features, or at least main features, but a complete program is included free of cost for an unlimited period of time. Distribution is allowed only with the permission of a developer. Shareware programs miss a number of features that are included in the full version of those programs. Thus, freeware is more usable, even if it does not include all possible functionalities.

Both freeware and shareware are copyrighted software. The code is not released and users are not allowed to make improvements. The developer controls the changes.

Shareware would be great if a company is not sure about whether to adopt a particular software or not. It allows trying the program before deciding on purchasing it. Freeware is good for the promotion of commercial software. A creator releases a similar version of the program but with a limited number of features.

And what does commercial software mean; what is its purpose?

What Is Commercial Software?

Commercial software is computer software that serves commercial purposes. It is created to make profit and can be either proprietary or free. The best example is Oracle. An authorized license is required to use the program, and the code is kept a secret. Thus, it cannot be distributed to third parties. At the same time, there are no restrictions in the package when it comes to features and the period of usage.

Commercial Software vs Open Source Software

There are endless debates on commercial software and open source software topics.

Open source software is a computer program with the source code and development model that are available to the public. It is based on three fundamental criteria – transparency, participation, and collaboration. This model is about collaborative development, where everyone can work on the code. It emphasizes the value of transparency and practicality in software. Users can edit and modify the source code, though the ownership belongs to the developer only. The idea behind open source software is that anybody who gets the program can go ahead and modify the code even more. The contributors work on such software all the time. One of the examples of an open source model is Odoo, a set of business management software tools.

So, what is commercial software compared to open source software?

Commercial software is easy to install and configure. Typically, it comes with an installation or setup assistant to guide a user from the beginning to the very end of the process. With an open source model, it is harder to get things working properly. Thus, it relates to the skill level and experience a user has with open source software tools.

Commercial software integration is more expensive because someone other than the team that has created it must pay for the license. But the guaranteed technical support is obligatory. In open source software, it is limited. Online training provided by the vendor is not available for the open source model. But the community support in fixing bugs leads to faster results than when there is only the vendor who is responsible for that. Commercial programs can be of moderate or expensive cost compared to the open source ones, which are completely free. Thus, depending on your needs, each of them could be the best one to implement.

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