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Advantages to Giving Software Away for Free

If you have ever been involved in the process of launching a piece of software to the public, then you know the difficulties and the costs of doing so. There is much more to do than just to launch your software to the world. First, let's just take a look at some of the basics of what you need to handle after launching an application (that do not involve programming):

  • Support (email, phone, helpdesk, etc.)
  • Licensing
  • Marketing

There is no way around support and marketing if you want a successful application, but luckily both can be done on the cheap side. There are plenty of free support desk applications to manage support inquiries and there are cheap methods to market your application. However, licensing and protecting your product can be expensive. If you want to make sure that your application is not copied and redistributed (so you can maximise on profit directly from selling the application), then you have to purchase licensing and encryption software, which can take a large chunk out of your wallet. However, if you have a quality application that people actually want, then the licensing software may quickly pay for itself.

But how about if you could avoid the licensing start-up costs and still make money off of your application? "Protecting" your application is an ongoing process that can be time-consuming and expensive. What about if you gave away your application for free? You could make money off of the traffic your application brings to your website. Also, you could use the increased traffic to launch another license-protected application in the future, with the additional funds gained from advertising and from support plans. However, the big advantage is not having to spend the money on licensing and encrypting software in the start-up process, so the money can be diverged into marketing or into support. Also, if you are low on funds to launch the application, it significantly reduces the launch costs if you release it for free.

Essentially, at Lowter, we released Ottoman with minimal costs because we released it under an open source license and for free. Lowter got more traffic, which led to increased advertising revenue. Plus, we did not have to deal with the stress of people essentially stealing our application against our software license. It really did not matter how people obtained it, but just that they visited our website after for resources and for help with using the application. Granted, the traffic from Ottoman has largely died down, but it still provided a substantial traffic increase when the project was active.

Basically, when releasing an application, consider offering it for free, or even just offering a free version to bring in more customers. You can still make money indirectly and a strong traffic base is indispensable for launching new products in the future.

Comments

  • Yuo forgot to mention that you could give the product away for free, but also offer a supported corprate version that is paid for; like MySQL and Red Hat Linux.

    Posted by Matt Oakes (external link) on Thu 29 May 2008 at 16:23

  • You missed this part: "from advertising and from support plans". I wasn't going into how to make money from free software, just the reduced start-up costs if you chose to do so. Plus, in reality, the corporate version is not very feasible for small developers who are just starting out.

    Posted by Ethan Poole (external link) on Fri 30 May 2008 at 7:42