The term shareware, popularized by Bob Wallace, refers to proprietary software that is provided to users without payment on a trial basis and is often limited by any combination of functionality, availability or convenience. Shareware is often offered as a download from an Internet website or as a compact disc included with a periodical such as a newspaper or magazine. The rationale behind shareware is to give buyers the opportunity to use the program and judge its usefulness before purchasing a license for the full version of the software.
Shareware is usually offered as a trial version with certain features only available after the license is purchased, or as a full version, but for a trial period. Once the trial period has passed the program may stop running until a license is purchased. Shareware is often offered without support, updates, or help menus, which only become available with the purchase of a license. The words "free trial" or "trial version" are indicative of shareware.
The term shareware is used in contrast to retail software, which refers to commercial software available only with the purchase of a license which may not be copied for others, public domain software, which refers to software not copyright protected, and freeware, which refers to copyrighted software for which the author solicits no payment (though he or she may request donations).
The term "shareware" predates the IBM PC. In the early days of personal computers (late 70's) there were few programs available. Many "computer hobbyists" simply wrote their own programs when there was nothing available to do the job. They shared these programs with other enthusiasts freely. The terms "freeware" and "shareware" were loosely used to distinguish them from commercial programs.
Popular Usage: In 1982, Andrew Fluegelman created a program for the IBM PC called PC-Talk, a telecommunications program, he used the term freeware. About the same time, Jim "Button" Knopf released PC-File, a database program, calling it user-supported software. Not much later, Bob Wallace produced PC-Write, a word processor, and called it shareware. Appearing in an episode of Horizon titled Psychedelic Science originally broadcast 5 April, 1998, Bob Wallace said the idea for shareware came to him "to some extent as a result of my psychedelic experience."
In 1984, Softalk-PC magazine had a column, The Public Library, about such software. Public domain is a misnomer for shareware, and Freeware was trademarked by Fluegelman and could not be used legally by others, and User-Supported Software was too cumbersome. So columnist Nelson Ford had a contest to come up with a better name.
The most popular name submitted was Shareware, which was being used by Wallace. However, Wallace acknowledged that he got the term from an InfoWorld magazine column by that name in the 1970's, and that he considered the name to be generic, so its use became established over freeware and user-supported software. 
During the late 1980s and early 1990s, shareware software was widely distributed over bulletin board systems globally and on diskettes (and subsequently, CD-ROMs) by commercial shareware distributors who produced catalogs of up to thousands of public domain and shareware programs. One such distributor, Public Software Library (PSL), began an order-taking service for programmers who otherwise had no means of accepting credit card orders.
As Internet usage grew, users turned to downloading shareware programs without paying long-distance charges or disk fees, spelling the end of bulletin board systems and shareware disk distributors. In addition to shareware libraries online, the authors of programs had their own sites where the public could learn about their programs and download the latest versions, and even pay for the software online.
The Internet also made it easier to locate niche software, as well as the best and most popular general software. During the early 2000s, and with the increasing popularity of Web 2.0, new ways to filter the software became available. Major download sites began to rank titles based on quality, feedback, and downloads. Popular software was sorted to the top of the list. Blogs and online forums further enabled individuals to spread news about titles they like. With this pruning in place, consumers can more easily find quality shareware products while still preserving the ability to find obscure and niche software.
Free/open source software and shareware are similar in that they can be obtained and used without monetary cost. Usually shareware differs from free/open source software in that requests of voluntary shareware fees are made, often within the program itself, and in that source code for shareware programs is generally not available in a form that would allow others to extend the program. Notwithstanding that tradition, some free/open source software authors ask for voluntary donations, although there is no requirement to do so. Free/open source software is usually compatible with the strict Association of Shareware Professionals shareware guidelines.
Sometimes, paying the fee and obtaining a password results in access to expanded features, documentation, or support. In some cases, unpaid use of the software is limited in time or in features — in which case the software is vernacularly called crippleware. Some shareware items require no payment; just an email address, so that the supplier can use this address for their own purposes.
Shareware is available on all major computer platforms including Microsoft Windows, Macintosh, Linux, and Unix. Titles cover a very wide range of categories including: business, software development, education, home, multimedia, design, drivers, games, and utilities.
With shareware, a developer bypasses the normal distribution channel eliminating the normal retail middleman markups and directly markets to the end user. The end result is a reduced end-user price compared to the retail channel. Users of shareware are encouraged to copy and distribute unregistered versions of the software to friends, coworkers and other acquaintances. The hope is that users will find the program useful or entertaining and will pay to register to be able to access all the features.
In the early to mid-1990s, large online distribution channels known as "portals", such as Download.com, Tucows, Yahoo! Games and RealArcade emerged. These portals acted as media of distribution for the shareware developers, providing a much larger audience than before.
Many shareware developers are individual computer programmers who develop their own product — entrepreneurs. Online shareware author communities, like the newsgroup alt.comp.shareware.authors, are often used by software seekers to post their novel software ideas for potential implementation.
In the early 1990s, shareware distribution was a popular method of publishing games for smaller developers, including then-fledgling companies such as Apogee Software (now 3D Realms), Epic Megagames (now Epic Games), and id Software. It gave consumers the chance to play the game before investing money in it, and gave them exposure that some products would be unable to get in the retail space.
With the Kroz series, Apogee introduced the "episodic" shareware model that became the most popular incentive for "registering" (or buying) the game. While the shareware game would be a truly complete game, there would be additional "episodes" of the game that were not shareware, and could only be legally obtained by paying for the shareware episode. In some cases these episodes were neatly integrated and would feel like a longer version of the game, and in other cases the later episode(s) would be stand-alone games.
Racks of games on single 5 1/4 inch and later 3.5 inch floppy disks were common in retail stores. However, bulletin board systems (BBS) and computer expositions such as Software Creations BBS were the primary distributors of all early low-cost software. Free software from a BBS was the motive force for consumers to purchase a computer equipped with a modem, so as to acquire software at no cost. At PC expositions, extant today, shareware was essentially free; the cost only covered the disk and minimal packaging.
In the mid-1990s, the shareware market declined and within a few years had virtually disappeared as a means for distributing computer games. The reasons for this are various, but could be closely linked with the decline of garage coders. Shareware was often a great means for games that were unable to get traditional marketing and retail exposure to get noticed. However, as technology improved, independent games were less able to be competitive in a commercial market, and larger developers found it unnecessary to release extensive shareware episodes, instead offering more limited demos in their stead.
The important distinguishing feature between a shareware game and a game demo is that the shareware game is, at least in theory, a complete game. Where modern demos are often a single level or less, shareware games usually had many hours of play with a beginning, middle, and end. Shareware episodes most commonly offered 1/3 or 1/2 of the entire registered version, and many even offered the entire product as shareware with no additional content for registered users.
In the 1980s and early-to-mid 1990s shareware was considered to be a concept for independent software writers to receive a degree of remuneration for their labor. However, after that the shareware model began to degrade as the term was used by commercial startups offering (sometimes substandard) commercial software and labeling non-functional or limited demo versions (known as crippleware) as shareware. As a result, the term shareware has shown reduced usage in recent years, replaced by either demo for trial software or freeware for full editions. However, shareware software is not always so limited in function, as demonstrated with programs such as The Bat!, GetRight, WinZip, and WinRAR, as well as various games.
Some shareware groups have liberal standards, allowing 'nag screens' that remind the user to buy the software, demonstration or "demo" versions and trialware. Some have refused to accept any software with limited functionality, including demos, trial use, or crippled software. Most groups, such as the Association of Shareware Professionals, the Software Industry Professionals group and PC Shareware clearly state their position that any software marketed as 'try before you buy' is shareware.
Another issue is the high percentage of projects that are either unsuccessful or just abandoned. Sites like Tucows, download.com, and Handango list hundreds of thousands of shareware projects, many of which are abandoned. One sampling found 76% of listed projects were abandoned or no longer being updated. Active projects commonly see less than 0.5% of downloaders convert to paying customers, and as much as half of the users may be using pirated versions of the software.
With the advent of the internet, many traditional shareware programs (such as photo editing tools or word processors) are now available directly through a web browser, therefore bypassing the entire process of having to download and install the application. In addition to offering the convenience of not having to install any software, most online applications are offered at no cost to the user, through means of online advertisements.
Other types of software distribution, taking the suffix "-ware" have followed shareware's lead. They usually do not require the user to make a specific payment to the author. Rather, they sometimes require the user to send the author a postcard (postcardware) or donate to a specific charity (careware); for more examples see otherware.
There are several widely accepted standards and technologies that are used in the development and promotion of shareware.
Shareware refers to free copyrighted software giveaways that usually have limited features which require a donation or purchase to unlock other features.
Shareware is a way to sell software.
Users can get games for free this way but most of the time these games do not have all the levels. Sometimes Internet Relay Chat clients let users have a demo of their client for 30 days, but after that, in order to keep using it, the user will have to pay money.