What the difference between open source and licensed software?

Open source is a set of principles and practices on how to write software. Literally "open source" means the source code is available to the users. The Open Source Definition, which was created by Bruce Perens and Eric Raymond and is currently maintained by the Open Source Initiative, adds additional meaning to the term. One should not only get the source code but also have the right to use it. If the latter is denied the license is categorized as a shared source license.

A software license agreement is a memorandum of contract between a producer and a user of computer software which grants the user a software license. Most often, a software license agreement indicates the terms under which an end-user may utilize the licensed software, in which case the agreement is called an end-user license agreement or EULA. When the software license agreement is between the software licensor and a business or government entity, it is often implemented as a specialized form of contract with many clauses unique to the license and the nature of the software being licensed.