Proprietary Software Licensing Models: History, Evolution and Trends

Proprietary software licensing models have undergone significant transformations over the years, driven by technological advances and changing market demands. This article reviews this evolution using narrative review methodology, highlighting the key developments and comparing different models. Initially, software was bundled with hardware under simple licensing agreements. As the software industry expanded, companies unbundled their software from hardware, growing their market and enforcing stricter terms of use and redistribution. The rise of the Internet in the 1990s led to the development of new licensing models, including subscription-based licensing and software as a service -models. Nowadays licensing models offer greater flexibility and scalability, addressing the diverse needs of businesses and customers. The growing adoption of subscription and usage -based licensing reflects an industry-wide shift towards recurring revenue streams and fostering long-term sticky customer relationships. Therefore, developing effective licensing strategies will be critical to shaping the future of the software industry.