Freeware refers to software that is, well, free of cost to use for an unlimited period of time. The opposite of freeware is referred to as, appropriately enough, payware.
Freeware may be proprietary in nature, in that the source code may be closed to users, but not necessarily.
It should be noted that freeware may not, in all its uses, be free. Depending on the license used by the author, it could be that a piece of software qualifies as freeware for personal, non-commercial use, but for commercial use, it becomes payware.
Thus, software that advertises “free trial runs” and the like does not count as freeware. It also does not include software that is not fully functional without components that must be purchased. Both of these refer to shareware.
Pirated software is also not included in this definition, as it is made to be free and costless against the will of the license holder.
The word "freeware" has been so overused, its meaning is no longer clear. Today it is often synonymous with "shareware," but for our purposes, I will define "freeware" as "software which can be downloaded, used, and copied without restrictions." (See this definition.)
Legally, the difference between freeware and open source is that you do not have access to the source code. Organizationally, this makes a big difference: There is no community and no development infrastructure around "freeware" as there is around open source software. Thus, while you can use freeware "as is," there is no real way to improve upon it or obtain support for it.
Thus, freeware is "free" as in those "Free Treadmill" classified advertisements.
Freeware software’s are available to use with no cost. Proprietary software’s can also be freeware software. Freeware software’s are generally used by companies to help developers, students and communities to develop software skills while using this freeware software, but not to loose their business potential software companies don’t give the source code of the software’s. Freeware software is different from shareware software.
Shareware is a different concept. You can download and try shareware for free, but if you use it, you are supposed to pay for it. It is developed and released by someone who keeps full control of the intellectual property. The user does not have access to the source code and cannot modify it. There is also no collaboration or community around shareware.
In the end, the only difference between shareware and commercial software is that you can download and try shareware for free. Like commercial software, you are ultimately dependent on the developer of shareware for enhancements and support.
Thus, shareware is "free" as in "Free Sample" at restaurants or grocery stores.
Shareware software’s are used for marketing purpose. Computer users can download and use a limited version of software or full version of software for a limited period of time. We can say that Shareware software is just like “Try before you buy”.
Freeware generally refers to software that is copyrighted and the term shareware refers to commercial software that is copyrighted, but which may be copied for others for the purpose of their trying it out with the understanding that they will pay for it if they continue to use it.
To confuse things even more, let's throw the definition of free software into the mix. Despite what common sense might indicate, free software is different from freeware, even though the term freeware is obviously derived from it.
Unlike freeware, free software is not only free, but is also open source. For this reason, it is more fully referred to as free and open source software, variously abbreviated F/OSS or FOSS. This allows for the maximum of freedom in redistribution and development.
In the words of the Free Software Foundation, they suggest to think of it as being “Free as in free speech, not free as in free beer.”
This is to be compared to the related commercial open source software, or COSS. This generally refers to software that in a limited version is also free and open source, but for a cost you can upgrade to a better or more feature-heavy version.
Free software can be used, modified and studied without any restriction. Free software can be copied and distributed with or without any modifications. A software is free when the end user get’s full software with the human readable form of the program called as source code with above permissions. Free Software Foundation maintains the definition of free software.
Open source software, sometimes abbreviated OSS, refers to software whose code is open to users to use, change and improve the product, as well as to redistribute the modified forms.
Open source may be free or at cost, depending on the license that the author places it under, or even free to some and at cost to others if dual licensed.
The idea behind open source is that large developer communities will be created around them, where users will contribute on everything from patches to whole new features, and thus accelerate the pace of innovation.
The antonym to this is proprietary software which, whether free or at-cost, has closed code and cannot be modified or redistributed by its users.
Open source means that the source code is available to all potential users, and they are free to use, modify, and re-distribute the source code. (For more details, see the Open Source Definition.) Legally, the "free" of open source refers exclusively to the source code, and it is possible to have support, services, documentation, and even binary versions which are not monetarily free. (Although some licenses, notably the GPL, requires that the source code always be freely available in such cases.)
In practice, open source usually means that the application is free to users as well as developers. Furthermore, most open source software have communities that support each other and collaborate on development. Therefore, unlike freeware, there are future enhancements, and, unlike shareware, users are not dependent on a single organization.
Open source advocates like to say that open source software is "free" as in "free speech," which is true. Since the user has the source code, it's also usually "free" as in "free lunch," even if sometimes you'd have to tip the waiter to get good service or pay for the wine.
Open source software can be defined as computer software for which the source code of the software is available under a copyright that must meet the open source definition.
There can be different open source copyright laws enforced by different software vendors.
The difference between open source software and conventional "closed source" software is primarily the availability of the source code to the general public.
In conventional source software, the source is kept private within the company or person(s) that the author the code. Generally, all updates and improvements to the software are made and distributed by the original authors.
Where as, with open source software the code is made available to persons and organizations outside of the organization that authored the original code. Since the code is generally readily available to the public, many people have the ability to view, troubleshoot, update, improve, and modify the code.
There are many different types of open source software. For more information of these types one should search for more information on "open source software licenses".