WSJ Article About Giving It Away

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Permalink Reply by Yeoh HS on March 28, 2009 at 8:04am

It seems like a good way to expand user base.

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Permalink Reply by Jason Cohen - blog.asmartbear.com on March 30, 2009 at 4:19am

It depends on the product. For example, Perforce has always given away free two-seat licenses, knowing that it will increase the number of people who know about and like their product. But that only works because the real money for them is for 50+ installations. If you intended to sell single-seat licenses it's maybe not as good of an idea.

An interesting middle ground is to make it intentionally easy to pirate your software. Law-abiding people (i.e. almost all companies) will pay, but if someone really wants it, it's better for them to use it than not use it.

Finally, it's true that "Can you give it away" is a good test of product worthiness.

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Permalink Reply by Bill Horvath on March 30, 2009 at 4:32pm

Thanks for the "Can You Give It Away" link! That's a terrific article.

Jason Cohen - blog.asmartbear.com said:

It depends on the product. For example, Perforce has always given away free two-seat licenses, knowing that it will increase the number of people who know about and like their product. But that only works because the real money for them is for 50+ installations. If you intended to sell single-seat licenses it's maybe not as good of an idea.
An interesting middle ground is to make it intentionally easy to pirate your software. Law-abiding people (i.e. almost all companies) will pay, but if someone really wants it, it's better for them to use it than not use it.
Finally, it's true that "Can you give it away" is a good test of product worthiness.

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Permalink Reply by Bill Horvath on March 30, 2009 at 4:35pm

Yes, but it also depends how much of a change it imposes on the organization. Our software (electronic medical records) pretty much requires everyone in the (paper-based) physician's office to change how they do business, so in order to give it away, we still need to support the implementation details.

Yeoh HS said:

It seems like a good way to expand user base.

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Permalink Reply by Ian Tebbutt on March 31, 2009 at 5:22am

Interesting, I think the issue you've picked up is actually a positive "...so in order to give it away, we still need to support the implementation details...".

If you change your thinking from selling software to selling a service then you're on the right path. Give the software away, then sell consultancy, implementation, training and so on. In your niche I'd be looking at innovative ways to garner more revenue. How about providing admin staff, providing a call centre so the physicians don't need to, leasing the hardware, providing the headed stationary - in short do everything that the physician needs that isn't specifically medical. If you focus like that you could own that niche in a few years time.

Your customers are not looking for software, they are looking to save time, money, and make their lives easier, a good piece of software is only part of the full portfolio that you can offer, and is an excellent loss leader. Realistically the software is free to copy, there's not much else that is so easy and cheap to give away.

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Permalink Reply by Yeoh HS on March 31, 2009 at 7:57am

Excellent point: software as a service.

Particularly good for custom made software for certain local clients.

My software biz model is solely desktop programs via Internet sales, so it may not be as effective for me.

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Permalink Reply by Karine Simard on April 2, 2009 at 6:09pm

Giving away the product as a strategy is not new. What's great about giving it away with SAAS is that it doesn't cost us anything (or almost nothing) to give free account on our system. In fact, it's a great sales tool.

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Permalink Reply by David Locke on April 2, 2009 at 7:49pm

Giving away software for free has always been effective. What wasn't effective was giving away commodity goods that lacked exit barriers back in the dot bust. Free got a bad name, because it was misapplied.

Free requires exit barriers. Free in that case is a way of building up a market.

Free is also the way to get geeks to advocate your product to their bosses in B2B situations. This free would be part of your technical evangelism.

Then, there is fremium.

All of these mechanisms provide an introductory offer and creates a market. Retaining that market is the key to the success of giving away software for free. Free does not mean that the vendor lacks a business model. Where a business model is lacking, don't blame free is things don't pan out.

Learning is the market barrier. Learning that creates expertise holds where ease of use run counter to learning and exit barriers. Free works in the early markets. It doesn't work in the late market where ease of use is key, which means that most SaaS or web-based applications live, hence free and webpage-based apps don't really mix. A web client is another matter. A web client can be free.

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Permalink Reply by Adriana Iordan on April 3, 2009 at 9:49am

How about using TrialPay? See an example of how Lavasoft chooses to deal with the freebies hunters: http://blog.trialpay.com/2009/03/20/trialpays-best-of-web-bow-awards/

Here's a post my colleague Roxana wrote on how to use the "Get it for free" model to turn shopping cart abandons into sales with TrialPay:
http://blog.avangate.com/avangate-trialpay-lead-management/

Adriana

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Permalink Reply by Joanna Lees-Castro on April 3, 2009 at 8:08pm

"Free" can be a good marketing strategy... if you've thought about how to either lock your user into your product (in the case of a free trial) or drive usage beyond the free level (more users, more data, whatever).

I've written about the "free software" business model on my website before: http://www.software-marketing-advisor.com/free-software-business.html

Focusing on the services (support, training, customization, etc) can be OK... although recognize that then that you can only make as much as you have people*hours in a day.

Joanna

Joanna Lees-Castro
http://www.software-marketing-advisor.com
"Providing marketing, sales and business planning guidance for software and services vendors"

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Permalink Reply by G.C. Hutson on April 4, 2009 at 12:23pm

One thing to remember in this discussion string....

You're not "giving away" your software... you are licensing a limited version of your software, without requiring fiduciary compensation from the end-user.

Remember, just because it's "shareware," you still own it... you still control it... and most importantly... you control both the end-user contract... and how the end-user uses the software.

Here's the fun thing about copyright law... it gives YOU, the copyright owner virtually ALL of the power.

You could "give away" your software, and always go back after the fact, to get paid.

I have always wondered why MORE groups don't "give away" their software. Once your audience is reliant on your software... getting them to pay is MUCH easier. ;)

(I will put up a video about Shareware, later this week.)

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Permalink Reply by Bill Horvath on April 6, 2009 at 9:25pm

Well, OK, but (and I apologize if this comes across as pejorative; it's not meant that way) that sounds awfully Machiavellian like a credit card contract, most of which I'm not particularly fond. Then again, if you're clear up front about usage limitations and what payment will be required down the road, I suppose it's reasonably fair.

Of course, I suspect most people (especially my clients, who tend to be smarter than the average bear) are wise to this sort of thing, and would view it as a barrier to entry -- See the article Let Me Go Back! in the previously mentioned blog about Giving It Away.

I'll be looking forward to the video

G.C. Hutson said:

One thing to remember in this discussion string....
You're not "giving away" your software... you are licensing a limited version of your software, without requiring fiduciary compensation from the end-user. Remember, just because it's "shareware," you still own it... you still control it... and most importantly... you control both the end-user contract... and how the end-user uses the software.
Here's the fun thing about copyright law... it gives YOU, the copyright owner virtually ALL of the power.

You could "give away" your software, and always go back after the fact, to get paid.

I have always wondered why MORE groups don't "give away" their software. Once your audience is reliant on your software... getting them to pay is MUCH easier. ;)

(I will put up a video about Shareware, later this week.)

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