Free is not the future of business.
Jason Fried, founder of 37 Signals, made this argument earlier this year at the Future of Web Apps conference. And this comment to Fried’s statement makes a great argument based on simple economics: free is unsustainable from a product development perspective. So how does Red Hat make money by leveraging an open source system like Linux? Here’s a recent article that sheds some light on this, Red Hat is contemplating building a North American channel partner program, and it’s recently inked a deal with Amazon, and here’s an academic paper that points to three dominant ways by which to make money on open source:
- consulting and support services around the software
- derivative products built on the community project
- increased revenue in ancillary layers of the software stack
The article goes on to predict that by 2012 more than half of open source revenue generated will derive from commercial open source.
I’m in agreement with Fried, and align with Robert Scoble,
I love paying for apps. Why? Because when I do that I encourage developers to build more cool apps for me…Anyway, the main point here is that it’s not the app store that’s screwed up: it’s our expectation that developers should work for free.
Scoble’s argument also aligns with Chris Brogan,
Don’t ever feel embarrassed to charge for value. Never apologize that something costs money if you’ve determined the value of it.
Makes sense to me.