When you purchase a piece of software, you purchase not the software itself but a license to use it under specified conditions. The license explains how, when, and where you are legally allowed to use the software. There are license terms and conditions that you are expected to follow whether you purchase a shrink-wrapped package from a store or whether you participate in one of the Unviersity's license agreements.
Licenses vary from product to product and vendor to vendor.
For example, the license for a word processing program might require that you use it on only one computer, while a license for a font or typeface may allow you to install and use it on several computers as long as they all print to only one printer. It's important to know the terms of the license before using a piece of software, because these agreements are protected by U.S. copyright laws. A Guide for Students, Faculty, and Staff at the University of Michigan, Reference R1174 . Some of the types of agreement the University participates in are volume purchase agreements, site licenses, and other agreements such as those concerning shareware and public-domain software. Most U-M license agreements coordinated by ITD are volume purchase agreements.