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The Great Software Payola (Part 3)

11/20/2012 8:50:30 AM

Free

Some software is free, even if there are those in the industry who hate this idea with every fibre of their being. They hate it, because they think free software devalues all software and raises expectations that all software should be free.

That’s nonsense, because when I hear music on the radio (for free), I don’t then wander along to HMV or wherever and then take umbrage with them when they expect payment for the CD album.

In the mobile space, this has been adapted to a two-tier system where a simple version of the app is free and a more professional version costs money. By using this method, those who just want to try the application aren’t hampered by spending money without trying, while those that do use the tool can invest in its future development.

So does ‘free’ have a downside? The likes of Adobe and Microsoft might say so, in that the level of support you can reasonably expect might not be there. Many small software companies are effectively one-man operations, where illness and other commitments can easily get in the way of releasing new versions or fixing known bugs in an existing release. However, this is actually a limitation of small software development companies, rather than the payment model they choose to use.

Description: Description: Description: So does ‘free’ have a downside? The likes of Adobe and Microsoft might say so, in that the level of support you can reasonably expect might not be there

So does ‘free’ have a downside? The likes of Adobe and Microsoft might say so, in that the level of support you can reasonably expect might not be there

As a means of subsidizing development, some app makers use in-title advertising, which is usually removed in the paid-for version. That’s usually a good strategic plan, because occasional users can put up with a few ads or they can pay to see them go.

There has been a long-running campaign from some big businesses to suggest that open-source software is more prone to bugs and virus infestations, although almost all empirical research suggests precisely the opposite. Windows is the most virus-infested OS in the history of the world, and it’s never been free or open source.

Those who are unconvinced of the validity of free software only need to look at the huge collection of very professionally written tools that you can download for free on the Linux and Android platforms.

Not every application can be free, because the time that software developers give needs to be paid for at some point, but there are some perfectly good applications that you can get for nothing that put commercial offerings to shame.

Those who enjoy a free application need to consider how they can get some investment to the developer if they want to see it evolve and grow, but that’s something for each person to consider how best to achieve.

Final thoughts

We’re at something of an economic crossroad in regard to software sales. Historically, big software companies have launched flagship products, which have generated large amounts of income from a substantial ticket price. The economic reality is that the amount of people prepared to pay for an operating system or office application has reduced due to worldwide economic pressures.

When money gets tight, users have a tendency to stick with the old product, rather than investing in the new one, and it’s something that’s a major concern for the likes of Microsoft. It’s a matter of changing those previously accepted rules or becoming extinct as other income generating methods flourish.

Description: Description: Description: In the past, people bought retail copies of software that they owned, but is that way of thinking something of the past?

In the past, people bought retail copies of software that they owned, but is that way of thinking something of the past?

Because of this, it is now expected that Windows 8 will cost substantially less than Windows 7 did when it first appeared, and Microsoft is known to be seriously exploring rental as an alternative model to purchase.

It would avoid the very high peaks and deep troughs in income that come with a new product launch and the run-up to the next release. That gives Microsoft accountants ulcers and makes predicting yearly income for the company a complete nightmare.

Changing to a rental model smoothes out those lumps and potentially increases the overall revenue stream for any product. Taking Windows as an example, a new version is released roughly three to five years, and you can get Windows 7 Professional upgrade in retail for about $144. A rental value of just $6.5 per month would return more to Microsoft over two years than the one-off cost.

Therefore, even at what might seem like, micro-payment levels, Microsoft could actually generate more income than it’s currently getting in the same period.

However and this is something critical to consider do we need to pay for software at all? Unless you’re looking for something with a very particular job, then it’s possible to find software that’s free to do it. That includes operating systems, office suites, and general productivity tools. The advent of Android and iOS has proven that being able to run Windows applications is no longer a necessity in modern computing devices.

Description: Description: Description: Microsoft has already offered rental for volume licensing customers. How long before that spreads to the retail sector?

Microsoft has already offered rental for volume licensing customers. How long before that spreads to the retail sector?

What’s clear is that the ecosystem is big enough for entirely commercial tools to exist alongside what is essentially ‘hobby’ or speculative software development. No one funding system for creating software is perfect, and new ones are being created all the time, such as Kickstarter.

For software users, the best scenario is the one with the most choice. Therefore, the payment models that bring us that should be the ones we actively support with our patronage.

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