Monday, June 07, 2004

How I Make Money On Free Software by Ted Roche

I figured Ted's comment may have been a little directed at me , from my post a while back about supporting shareware and commercial authors.

He's makes a good point: "I'm in the business of consulting, not value-added resale. " But it doesn't answer the question for those who are in the "get rich or die trying" scheme (you know who you are).

The subscription model is the one I always think about when pondering "free software". We do it at MTI (http://www.mtihorizon.com) with our e-services - give away the tool but charge per transaction. It seems to work but it takes a long time for the "bricks+mortar" type businesses to move to that approach. They are used to selling a product, as opposed to a service.

As far as I'm concerned, it's the one that makes good sense for businesses to consider. All the big box stores (costco) offer "clubs" which are in effect annual subscription services, in exchange for some benefits. Annual maintenance and licensing fees are simply forms of "subscriptions".

Once the service stops being of value, you un-subscribe. What a great way of getting the message across to the vendor: I'll give you money as long as what you have works - when it stops, I stop paying you. Kind of like consulting, I'll give you money as long as what you do gives me value.

No value -> no money : what a concept.

Great post, Ted! - Thanks

Ted's Radio Weblog

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