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A software license is a document that provides legally binding guidelines for the use and distribution of software. Software licenses typically provide end users with the right to one or more copies of the software without violating copyrights.
Most distributed software can be categorized ing to its license type (see table). Two common categories for software under copyright law, and therefore with licenses which grant the licensee specific rights, are proprietary software and free and open-source software (FOSS).
Software licenses aren't cheap. On average, Microsoft 365 and Google Workspace business and enterprise licenses cost $10-$30/user/month.
A licensing agreement allows one party (the licensee) to use and/or earn revenue from the property of the owner (the licensor). Licensing agreements generate revenues, called royalties, earned by a company for allowing its copyrighted or patented material to be used by another company.
Typically, the term ?software licensing? is used to refer to protection of software against piracy and over-usage. Some examples of what software licensing technology allows: Customers can evaluate software with restricted time and/or features.
Without a license, using and redistributing the software would be considered a breach of copyright law. When buying software for your business, one license is good for one employee. So however many people are going to be using the tool, that's how many licenses you need.