# IT Software > IT Software means data, images, and sounds within machine-readable formats manipulated by automatic data processing machines **Term:** IT Software **Last updated:** 2026-07-29 ## Definition ## What IT Software Means in a Contract IT Software, as a defined term, describes the programs, code, data sets, images, and sound files that exist in a machine-readable format and can be processed by automatic data processing machines such as computers, servers, and embedded devices. When a contract uses this phrase, it is usually trying to draw a boundary around what is being licensed, supplied, supported, or transferred, separating the intangible digital asset from any physical hardware or printed documentation that accompanies it. The term becomes operative whenever rights, obligations, or restrictions attach specifically to software rather than to services or equipment. For example, a supplier might grant a license to use IT Software while retaining ownership of the underlying code, or a customer might warrant that it will not reverse engineer IT Software provided under the agreement. The precision of this definition determines how far those rights and restrictions extend. Because software can be embedded, bundled, or delivered as a service, the contract's definition of IT Software often needs to clarify whether it includes updates, patches, configuration files, and associated data, or whether those items are treated as separate deliverables governed by different clauses. ## How IT Software Is Defined or Measured Most agreements define IT Software by reference to its function and format rather than by any fixed technical specification. The core description usually covers data, images, and sounds in machine-readable form that can be manipulated by automatic data processing equipment, which is a deliberately broad formulation designed to capture evolving technology without needing constant amendment. Some contracts refine this baseline definition by adding a schedule or annex listing the specific software products, version numbers, or modules covered. This is common in enterprise licensing and technology procurement, where precision about scope avoids later disputes over whether a new release or a bundled utility falls within the license grant. - Source code versus object code, and whether both are included - Whether documentation, user manuals, or configuration data count as part of the software - Whether third-party components or open-source elements are excluded or separately licensed - Whether updates, upgrades, and patches are automatically incorporated into the definition ## Where IT Software Appears in Agreements The term shows up most frequently in software license agreements, technology supply contracts, master services agreements, and outsourcing arrangements. It also appears in confidentiality and intellectual property clauses, where the parties need to identify which materials are protected trade secrets or proprietary assets. In the