Software can be freeware, trialware, shareware, open source, public domain, retail, or proprietary:
1) Freeware: Freeware software as the name says is absolutely free software for a user for personal use. The company who makes the software still owns the rights and you can’t redistribute a freeware by modifying it. Many companies do allow modifying a software for personal use. For restrictions for particular software you have to refer to their terms and conditions. A freeware may have limited functionalities and the full version can be downloaded by paying a fee. Many companies these days use this strategy to market their software products.
2) Trialware or demoware: A trailware is a software which is provided to a user for trial purposes. A trial version has different sets of restrictions. Some of them are for trying the product for a certain number of a particular duration. When the time has elapsed, the trialware stops working and then the user have to buy the full version. Others restrictions also include less functionalities in the trialware.
3) Shareware: A shareware is a software which can be distributed. The software works like the full version of the product with some functionalities deliberately turned off. A user after certain time (as set up in the software) gets a pop up dialog box which asks him to buy the full version for unlimited functionalities or usage. Many companies also put a time restriction after which the software may stop functioning fully. Then the user has to buy the product to use it.
4) Open source software: For a open source software the code of the software is open to the public. People can edit and distribute the software as per their own requirements. They can also sell new softwares by creating a software from the open source provided the company who originally created the product allows them to. Many open source licenses are such that users can edit a software and create new versions, and even distribute provided the new software is free. For details, you have to read the license of a particular open source software.
5) Public domain software: Public domain software is the one for which is not copyright to any individual or organization. Public domain software is not related to freeware in any ways. For this software, there’s just no copyright involved.
6) Retail software: A retail software is the one which is sold to a customer in the form of a CD or a DVD. These softwares can be bought from a retail outlet, hence the name retail software. Typical license type for a retail software includes that the product can be used for one computer or three computers, etc.
7) Proprietary software: A proprietary software is the one which cannot be modified, shared or redistributed by the user. The company which is providing the proprietary software has the legal copyright for that particular software.