I mean, clearly, consider: Microsoft, Oracle, IBM, Adobe, AutoCAD, etc. They all license their software, either as a one-time license purchase, or (increasingly) as an annual license fee.
On a smaller scale, I've worked at several companies that license their (proprietary) financial trading software to trading firms. The software is used to connect the customer's algorithmic trading applications to stock exchanges, etc. Licensing fees are tens of thousands of USD a year.
For something like Microsoft Word, there's a bunch of circumstances that contribute to it being a viable product despite the existence of eg. LibreOffice. Those circumstances are probably hard to replicate for an individual or small team though.
For something targeting a more specific niche, it can be easier to deliver enough value to the potential customers that they're prepared to pay for the software. Often, the licensing is part of a package deal involving ongoing support, customisation work, and access to the software.
I've noticed that some customers seem to actually prefer to pay for something, for a combination of reasons including a feeling of access to something others don't have, a feeling that they'll have more input into the future development, having someone (contractually) responsible for answering questions/fixing bugs/etc, and even just a general desire to contribute to the upkeep of something they leverage in their business.