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Freeware Brian Majerus November 22, 2013 1. What is it? Software that is available free of charge What’s the catch? – There isn’t always one, but… – Advertising.

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Presentation on theme: "Freeware Brian Majerus November 22, 2013 1. What is it? Software that is available free of charge What’s the catch? – There isn’t always one, but… – Advertising."— Presentation transcript:

1 Freeware Brian Majerus November 22,

2 What is it? Software that is available free of charge What’s the catch? – There isn’t always one, but… – Advertising – Account upgrades – Premium content – Privacy 2

3 Free Software vs. Freeware The “free” in “free software” refers to the license terms – Often open-source – Users may study, modify, and redistribute – Price ≥ $0 The “free” in “freeware” refers simply to its purchase price of $0 3

4 Software Engineering Software Engineering isn’t just coding It also includes: – Business models Making money – Economics How do consumers select a product? – Philosophy Working with purpose 4

5 WHY DEVELOPERS VOLUNTEER 5

6 Motivation 2003 MIT study Survey of 684 developers – Volunteer contributors to projects 6 Motivation% of volunteers Code for project is intellectually stimulating to write46.1 Improve programming skills45.8 Code needed for non-work user need37.0 Believe that source code should be open34.8

7 Altruism Software developers have skills others need Help out a friend Support a group or charity Help mankind – LibreOffice 7

8 Personal Improvement Résumé padding Networking Name recognition Learn new technologies Try out new ideas “Stick it to the man” Do something fun! 8

9 Abandonware No longer supported commercial software – Not profitable to pursue copyright violators – Original developers gone – Relicensed or transferred to public domain Often old games kept alive by cult following – SimCity2000 (1994) – Wolfenstein 3D (1992) Maintained by passionate fans 9

10 Donationware Fully functional software Development supported by user donations No cost of anti-piracy efforts Developers paid for hobby E.g. Notepad++ 10

11 HOW TO GO “FREE” WITH PROFIT IN MIND 11

12 Adware Maker profits from advertising in software Nearly any software which connects to the web can be ad supported – Websites – Mobile Apps – Even standalone software Google AdSense 12

13 Adware Cont’d Ad-free version often offered for a fee Concerns – Intrusive advertising – Privacy – Malware 13

14 Freemium Free software with paid, premium features Examples – After-install purchases Microtransactions – Extended features E.g. Skype’s three way calling Concerns – Surprise fees – “Pay2Win” 14

15 Promotion of Other Products Microsoft’s Internet Explorer Adobe’s Acrobat Reader – Standardization of PDF Google’s Android 15

16 Beta Software Free access to incomplete software Users perform testing Developers get free marketing Final release no longer freeware Common in gaming industry 16

17 Research Study user habits with widely used freeware Use “big data” to make decisions – Target advertising – Optimize systems – Learn user tendencies Sell data to other corporations E.g. Google, Facebook 17

18 WHY DOES THE FREEWARE BUSINESS MODEL WORK? 18

19 Cost of Distribution Physical media is expensive High up-front costs deter potential buyers Anti-piracy is expensive and ineffective People aren’t paying for software anymore Support is time consuming 19

20 App Math Smartphones – $200 Facebook machines? – Users are hesitant to pay for apps App Pricing – 1$ - “Maybe” – 4$ - “Seems a little pricey” – 10$ - “Outrageous!” 20

21 App Math Top 100 grossing apps – Apple App Store: 87% free – Google Play: 99% free Why? – Median software developer salary: $85,000 – Profit split for developers in app stores: 70% – At 1$/app, earning a median salary requires 121,000 purchases/year! 21

22 App Math Paid apps are less popular and less profitable Follow the leaders – DLC – Premium Content – Advertising 22

23 WHERE THE FREEWARE MODEL DOESN’T WORK 23

24 Critical Software Freeware use in corporate world risky – Licensing of freeware varies For profit development using freeware Distributing 3 rd party solutions – Minimal or nonexistent support – Free solutions lack “a throat to choke” 24

25 Consistent User Experience Freeware usually targets a single market Proprietary software often bundled Some users prefer a consistent experience Good alternatives can be hard to find 25 ProprietaryFree Microsoft WindowsLinux Microsoft OfficeOpenOffice, LibreOffice Internet ExplorerGoogle Chrome, Mozilla Firefox Windows Media PlayerVLC, Winamp

26 Conforming to Standards Freeware fighting established standards PDF standardized by Adobe DOC and XLS standardized by Microsoft Simplicity for users – “It just works” 26

27 The Search One commercial product may have many free alternatives – Good, bad, and ugly Sifting through the options can be challenging Choosing incorrectly can be dangerous Consumers fall back to most familiar product 27

28 Perception of Quality Many see freeware as inferior product Does cost correlate to quality? – Yes or no, some certainly think it does Users may choose familiar paid option over finding best, free alternative Antivirus is common example – Products subject to perceptions – Malware victims feel less at fault when a paid product fails 28

29 Summary Volunteering your skills Freeware is profitable (if you want it to be) Consumer behavior Drawbacks of freeware 29

30 What are your questions? 30

31 References Niculescu, Marius Florin and Wu, D. J., Economics of Free Under Perpetual Licensing: Implications for the Software Industry (September 13, 2013). Pujol, Nicolas, Challenges Specific to Freemium and Two-Sided Markets (December 4, 2011). Bessen, James E., Open Source Software: Free Provision Of Complex Public Goods (July 2005). Lakhani, Karim and Wolf, Robert G., Why Hackers Do What They Do: Understanding Motivation and Effort in Free/Open Source Software Projects (September 2003). MIT Sloan Working Paper No Beuscart, Jean-samuel and Mellet, Kevin, Business Models of the Web 2.0: Advertising or the Tale of Two Stories (April 7, 2009). Communications & Strategies, Special Issue, November


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