Software development is the process by which software is created. Fifty years ago software development was a solitary activity in which one individual worked on one project using intuition. Today software development is done by teams of individuals working together using specific techniques and methodologies.
An end user is an individual (or organization) which uses software. A software license is a legal document governing the distribution and use of software. Typically a software license grants an end user the right to use one (or more) copies of a software item under certain circumstances that would otherwise violate the software owners' rights under copyright law. Proprietary software is software that is owned by its publisher but which is licensed for use by the end user. For example, Microsoft owns MS Word. If you buy a Word, what you are actually doing is buying a disk (or download) and a license to use the software under the rules that Microsoft grants to you. In general, the license gives you the right to install the software on one (or more) computers and use it. However you do not own the software so you may not give or sell it to someone else for their use except under circumstances outlined in the End User License Agreement (EULA). Open source software gives non-exclusive ownership of the software to the individual who obtains the software legally. Open source software essentially waives certain rights of the copyright holder to the end user. There is an EULA with open source software, but the end user doesn't have to accept it. If the end user does however accept it, additional rights are typically granted that the end user would not otherwise have.
Software licenses also typically contain provisions about liability and warranty. For example the typical software license for a program capable of ripping songs from a CD and converting them to MP3 files will typically grant the right to use these features to you only if you have a legal copy of the CD being ripped. Thus if someone uses a program to pirate music the software publisher will claim in the EULA that the crime is the responsibility of the end user and not the publisher. The Digital Millennium Copyright Act addresses the manufacture of software of this type.
Software can be distributed by a variety of means.
Wikipedia article on software development process
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