The unauthorized copying of software. Most retail programs are licensed for use at just one computer site or for use by only one user at any time. By buying the software, you become a licensed user rather than an owner (see EULA). You are allowed to make copies of the program for backup purposes, but it is against the law to give copies to friends and colleagues.
Software piracy is all but impossible to stop, although software companies are launching more and more lawsuits against major infractors. Originally, software companies tried to stop software piracy by copy-protecting their software. This strategy failed, however, because it was inconvenient for users and was not 100 percent foolproof. Most software now requires some sort of registration, which may discourage would-be pirates, but doesn't really stop software piracy.
An entirely different approach to software piracy, called shareware, acknowledges the futility of trying to stop people from copying software and instead relies on people's honesty. Shareware publishers encourage users to give copies of programs to friends and colleagues but ask everyone who uses a program regularly to pay a registration fee to the program's author directly.
Commercial programs that are made available to the public illegally are often called warez.
See "Is Software Ownership the Same as Licensing?" in the in the "Did You Know..." section of Webopedia.
Also see "All About Software: Categories of applications software explained" in the "Did You Know..." section of Webopedia.