Perpetual license

Proprietary software licenses

Traditionally, software was distributed in the form of binary object code that could not be understood or modified by the user, but could be downloaded and run. The user bought a perpetual license to use a particular version of the software. Software as service (SaaS) vendors—who have the majority market share in application software as of 2023—rarely offer perpetual licenses. SaaS licenses are usually temporary and charged on a pay-per-usage or subscription basis, although other revenue models such as freemium are also used. For customers, the advantages of temporary licenses include reduced upfront cost, increased flexibility, and lower overall cost compared to a perpetual license. In some cases, the steep one-time cost demanded by sellers of traditional software were out of the reach of smaller businesses, but pay-per-use SaaS models makes the software affordable.