Academics claim that the university's actions, part of a plan to boost income from intellectual property, will damage research work; lead to an exodus of talented staff; and restrict the use of open source software.
Under the proposals, the university will have the right to market software developed by academics, with the profits being split equally between the university, the department and the program writer.
Cambridge said the move is designed to encourage academics who are less commercially minded to exploit the results of their research work. It will also bring in income to the university.
But academics fear that the new rules will make it harder for university staff to share their software among themselves, damaging research work. Currently, UK universities do not have a standard approach to who owns the intellectual property rights to software research by academics.
"Many people in the university make software freely available under general public licences. This is the fastest and most efficient way of sharing results with colleagues. This benefits all sorts of people from linguists, who develop programs to analyse language, to radio astronomers who analyse galaxies," said Ross Anderson, reader in security engineering.
Anderson claimed that the university is pandering to Microsoft chairman, Bill Gates, who has donated tens of millions of pounds to fund scholarships and a new computer laboratory. The new rules, Anderson said, will mean that Microsoft software will take over from the free software favoured by academics.
"So long as a decision to put software in the public domain is mine, I can laugh at Gates. If it's a decision of a Mr Functionary, Microsoft software will take over. Gates will get at Mr Functionary. Guaranteed," he said.
The university denied these claims, saying that no academic will be forced to commercialise their software if they do not want to.
Robert Marshall, head of technology transfer, said, "There is certainly no intention to impede academic work or to stop people publishing their work.
"There is an assumption that the university would attempt to force people to do something they don't want to. But we would much rather work voluntarily," he said. "We don't want to stop people sharing software."