There are many different types of software, which can be a little confusing for the uninitiated. Following is a brief definition of each type, and the differences between them.
Retail software: This type is sold off the shelves of retail stores. It includes expensive packaging designed to catch the eye of shoppers and, as such, is generally more expensive. An advantage of retail software is that it comes with printed manuals and installation instructions, missing in hard-copy form from virtually every other category. However, when hard-copy manuals and instructions are not required, a downloadable version off the Internet will be less expensive, if available.
OEM software: OEM stands for "Original Equipment Manufacturer" and refers to that sold in bulk to resellers, designed to be bundled with hardware. For example, Microsoft has contracts with various companies including Dell Computers, Toshiba, Gateway and others. Microsoft sells its operating systems as OEM software at a reduced price, minus retail packaging, manuals and installation instructions. Resellers install the operating system before systems are sold and the OEM CD is supplied to the buyer. The "manual" consists of the Help menu built into the program itself. OEM software is not legal to buy unbundled from its original hardware system.
Shareware: This software is downloadable from the Internet. Licenses differ, but commonly the user is allowed to try the program for free, for a period stipulated in the license, usually thirty days. At the end of the trial period, it must be purchased or uninstalled. Some shareware incorporates an internal clock that disables the program after the trial period unless a serial number is supplied. Other shareware designs continue to work with "nag" screens, encouraging the user to purchase the program.
Crippleware: This software is similar to shareware except that key features will cease to work after the trial period has ended. For example, the "save" function, the print function, or some other vital feature necessary to use the program effectively may become unusable. This "cripples" the program. Other types of crippleware incorporate crippled functions throughout the trial period. A purchase is necessary to unlock the crippled features.
Demo software: Demo software is not intended to be a functioning program, though it may allow partial functioning. It is mainly designed to demonstrate what a purchased version is capable of doing, and often works more like an automated tutorial. If a person wants to use the program, they must buy a fully functioning version.
Adware: This is free software that is supported by advertisements built into the program itself. Some adware requires a live Internet feed and uses constant bandwidth to upload new advertisements. The user must view these ads in the interface of the program. Disabling the ads is against the license agreement. Adware is not particularly popular.
Spyware: Spyware is normally free, but can be shareware. It clandestinely "phones home" and sends data back to the creator of the spyware, most often without the user's knowledge. For example, a multimedia player might profile what music and video files the program is called upon to play. This information can be stored with a unique identification tag associated with the specific program on a user's machine, mapping a one-to-one relationship. The concept of spyware is very unpopular, and many programs that use spyware protocols were forced to disclose this to users and offer a means to turn off reporting functions. Other spyware programs divulge the protocols in their licenses, and make acceptance of the spyware feature a condition of agreement for using the software.
Freeware: Freeware is also downloadable off the Internet and free of charge. Often freeware is only free for personal use, while commercial use requires a paid license. Freeware does not contain spyware or adware. If it is found to contain either of these, it is reclassified as such.
Public domain software: This is free software, but unlike freeware, it does not have a specific copyright owner or license restrictions. It is the only type that can be legally modified by the user for his or her own purposes.
People are encouraged to read licenses carefully when installing software, as they vary widely.