Until early 1970's, sharing of software was the accepted norm. Hardware came bundled with software products which could be freely redistributed and the access to source code allowed its improvement and modification.
In late 1960's, the situation changed after the software cost increased and manufacturers started to unbundle the software and hardware. A growing amount of software was now developed for sale. In late 1970's and early 1980's companies began imposing restrictions on programmers through copyright. They achieved financial gains by selling rights of use of software rather than giving the source code.
This led to introduction of software licensing which governed the usage and redistribution of software. During this time most of the companies developed proprietary software that was actually the property of the company, came without the source code and the users basically bought the right to use it in the way specified under the license agreement.
In early 1980's the seeds for free and open software were sown as a deviation from the proprietary software. The open source software comes with source code and a license that allows modification and free redistribution.
We will study in the following section, about different types of licenses that evolved with software over the period of time.