How Much Technology Do We Deserve for Free?
If ever there was a capitalist "world," it is the Internet.
Think about it. Entrepreneurs develop e-commerce businesses and sell all kinds of products and services; companies develop software and market it as solutions for consumers and other businesses. And all companies who do business on the Internet are in a very competitive market and must develop marketing strategies to woo customers and keep them. This often requires offering special benefits and perks that attract consumers away from competitors. And this is what capitalism is all about – free enterprise and a competitive marketplace.
Disruptions are occurring to this free enterprise system, however, not the least of which is the discussion regarding the extent to which software and technology should be free.
Free Unlimited Technology – The Proponents
This is the subject of some debate of late, certainly within the realm of those who believe that anything on the web is "free game" for anyone. When this demographic acts out on its belief, it copies the technology that others have created, even when those others have a fee attached to that technology. They then become known as "hijackers" or "pirates." Their argument includes the following points:
Software is not a material thing and therefore copyright laws do not really apply.
Software developers should make their basic technology free and then can charge for upgrades. The rise of open-source software has been the impetus for this argument. Consider, for example, WordPress, which is open source but which now comes with many plugins developed by individuals who sell them.
Charging for technology harms those individuals who cannot afford it. This is particularly true for students, wherein those in poor districts will not have access to the technology that their peers in wealthier districts enjoy.
Software developers should provide their technology for free and find funding and other methods of earning money for what they do.
These and other arguments are put forth by a number of "free software" organizations (FSM, FOSSM, FLOSS, and GNU Project) and is really a social movement attempting to "level the playing field" for all computer users. Everyone, they claim, should be free to run any software, to study any software and to change it, and to share copies of software with anyone else. Members of these organizations refuse to install proprietary software, and many will purchase a piece of software, study it, and then produce a free version to be distributed to anyone. Others engage in outright piracy, believing that they have the moral right to do so.
While this movement is small, it is becoming more vocal. The question is, are their arguments valid, and is universal free technology a realistic goal?
Free Unlimited Technology – The Opponents
Obviously, the opponents are those individuals and companies that develop software for sale and for profit. Here are their arguments:
If there were not profit involved, much of the software and technology we have today would not have been developed, nor will continued development occur.
Individuals and companies who spend time, hard work and money developing software and other technology deserve to own a copyright on what they develop, just as much as a book is copyrighted and an auto part is patented. And they deserve to earn money each time their software/technology is sold.
The law is on the side of software/technology developers/owners, as many court cases regarding piracy and counterfeiting attest, even in China.
Can Monetizing Go Too Far?
In the spirit of competition, a lot of software developers/owners have provided their basic versions for free, in order to get conversions and then promote their fee-based upgrades. Or they offer free trials, knowing that many will turn that trial into a purchase. Others embed their software apps with advertising so that they can then offer that app for free. Then, the consumer can pay a fee to remove the advertising.
And greed can hit the software market too. Just recently, Evernote limited its free version; Hulu had a free tier due to ad support, but it is trashing that and opting for a collaboration with "Yahoo View." The question becomes, then, how much will the consumer tolerate before he begins to search for other options rather than pay more or settle for less? Microsoft used to sell a permanent copy of its full Office suite. Now it sells a subscription-based plan as well which must be renewed. It cuts the initial cost in an attempt to compete with lots of open-source options. Google Docs, for example, can do most everything that the Office suite can do, and there is no worry about losing files when they are stored in the cloud. Free presentation software abounds; even Evernote faces free alternatives which customers are sure to explore.
One of the most popular types of software right now is the entire group of converter products, both free and paid. Business and commercial needs have created a demand for converting video, audio, presentation, and text file formats. Initially, there were only fee-based software options. Now, however, there are free options, or at least free trial options for software, such as an Mbox to pdf converter, a software that is especially important to lawyers.
And here is the general takeaway from this example. When there is a niche software need and the demand is great, companies can charge for their software, because there are fewer other options developed. More generic software, however, which appeals to a larger public, will find more free options as competition.
How Fee-Based Software/Streaming Companies Can Survive
Obviously, software developers do not believe that the world should have free access to their products. But, they are going to have to make some changes in how they price and support their products. Here are a few things to consider:
Develop consumer-centric pricing strategies, such as dropping licensing fees in favor of maintenance fees. Free options do not offer maintenance.
Convert to SaaS rather than a downloadable product that ties up hard drives
Find value that free open software cannot provide
Offer flexible options for purchasing. Let customers purchase individual components at a la carte pricing.
It's doubtful that the general population believes that all software and technology should be free. That may be the reason why the free software movement remains rather small. There is something in our nature that believes people should be rewarded when they work hard and create something. The challenge for that creator, however, will be to find that sweet spot of pricing and other monetizing efforts that will be palatable.
