A proprietary system is a system which relies upon software and equipment which is licensed from a copyright holder. Some examples include proprietary software, operating systems, and entire computer systems. The way in which the user utilizes the system is restricted both by the terms of the license and by blocks within the system which are designed to prevent certain activity. In this type of system, a person can have the permission to use it, but not to fully modify or change it.
In the example of an operating system, a company develops an operating system and then compiles it so that the source code of the system can only be read by a computer, not by a person. When someone wants to install that operating system, it is necessary to pay a licensing fee, which grants the user permission to use the software while the developer retains the copyrights and ownership. Usually the system has an interface which allows the user to make changes to increase functionality, but the user cannot change the operating system on the level of the source code.
For example, most operating systems allow people to manipulate the visual display to make things larger and smaller, change desktop backgrounds, and change color schemes. However, someone could not enter the source code to do something like shutting off a function or enabling a function. It's also not possible to directly modify the source code to change the way in which the software functions.
People who use proprietary systems are usually provided with support by the developer or manufacturer. While the system is closed and does not allow direct user modifications, people are allowed to make many types of changes through various system interfaces to meet their needs. People can also install other systems which can work inside or with the proprietary system to enhance functionality. For example, if an operating system didn't have a built in clock, the user could download a clock program to display a clock.
The opposite of a proprietary system is an open system, in which the source code is freely available and people can make changes at any level. Some companies license their products for a fee and release the source code, while others provide their products free with the source. One advantage to releasing source code is that it allows developers to design software which works well with the system and to develop patches and fixes for problems. One disadvantage is that it is easy to copy the source code and distribute it to other users who do not pay a license fee.
It is also possible for a whole proprietary system to be totally closed. For example, Apple's mp3 players are proprietary and not designed to be serviceable by users not only in terms of their software, but also in terms of their hardware.