Freeware is proprietary software that is available for use at no monetary cost, though it cannot be modified, redistributed or reverse-engineered without prior permission from the author.  The two most popular examples of freeware are Skype and Adobe Acrobat Reader. 
The question then is, why would people create freeware? Besides benevolence, the owner may benefit from sales of a more capable version of the software. Sometimes, an advertisement may be included with the software, when it is downloaded. This in turn raises another question — just how “free” is this software?
Free software differs from freeware, in that there is access to its source code, which can be modified and then commercially sold or even redistributed, unlike that of freeware. Also, freeware occasionally has a key feature intentionally disabled so that users are then encouraged to purchase the paid version.
The use of freeware could also occasionally be accompanied by a pop-up that appears frequently, prompting the user to donate to the cause of the developer. This does not change the fact that this software is still freeware. However, the quality of the application may be called into question, especially if the pop-up appears too frequently, which is why the software can no longer be called “donationware”, but becomes the less appreciable “nagware.”
Occasionally, trial versions of software are misclassified as freeware. These are essentially paid software, whose date of payment is usually deferred. Sometimes, the user may be prompted for payment details while downloading a trial version and the money is deducted when the trial period expires, automatically confirming the purchase of the full version.
Freeware may meet the business needs of an organization, either independently or by bringing the features of its full version to the attention of the user. However, like most products or services labeled free, there is always a catch. It is important to evaluate if the freeware is free when used for commercial purposes. Most software manufacturers track usage of freeware to evaluate compliance to licensing terms and conditions. Hence, a thorough understanding of the terms and conditions associated with the licensing of such products is essential. After all, we live in a world with no free lunches.