Over the years, I have had the chance to provide IT support services to hundreds of individuals. Throughout my career, one question from users has always astonished me, “Can I get this for free?”.

Whether it was office productivity, virus prevention, or other types of software, I was surprised to see how many people expected to acquire it for free. One individual even stated, “Well, I don’t use it that much”. Now bear in mind, these users were not seeking to download a free version of the software made available by the vendor. They were wanting to get a “Free” copy of the software that was on sale between tens and hundreds of dollars.

When it comes to the purchase of software, many people think of it differently than acquiring other pieces of property. Since software is not tangible, we think of ownership differently. If we think about physical objects like a purse or an outfit, we can clearly expect them to come at a price. One doesn’t walk into a store and expect to walk away with a suit without paying for it. Nor does a person think, “Well, I will only wear this once or twice a year, therefore I shouldn’t be expected to pay”.

However, when it comes to software, some users can easily set these expectations. Now granted, some of my experiences with users are from a long time ago, when computer software companies had a different business model. Nowadays, many of our regularly used software or services are provided free, or with a low monthly subscription.

“Free” Services

These days, there are many “free” options available for software services, from email to office productivity. However, many of us don’t realize that those offerings do come at a cost. Often times we pay for the service by trading away our privacy and our data.

For example, Google offers a host of software products free to use, upon creation of a Google account. Those products are not available for download, but rather accessed through their online portal. Any documents you create with those services will be hosted on Google’s severs, and therefore be accessible by Google.

Along with documents you create, everything you do with your Google account is now neatly consolidated and stored for Google to use as they see fit. From places you visit through Google Maps, to YouTube videos you watch, to all your searches that you ever make.

Now, in their defense, the software vendors do need to support their business in some way. If they are not charging you to use their software and services, they must create an alternate revenue stream, which is where advertising comes in for many tech companies. By tracking your activities and data you input into their services, companies like Google and Facebook are able to monetize that data through advertising. This is one of the ways they can be a profitable company while offering free services to users.

Subscriptions

In the last few years, many companies have opted to offer a subscription model for their products and services. While some may see this as a never ending cycle of giving your money to businesses, others see it as an affordable option for products that were previously out of their reach.

Take the Adobe Creative Suite for example. In the old days, you would have had to purchase a license for each user/workstation that would be using the product. A single product license could cost up to $600 with the entire creative suite reaching up in the thousands. Of course there were volume licensing and other promotions offered, but this is to just give an example.

In this scenario, professionals who needed this software would have to pay this huge up front cost, only for the software to be outdated within a year. As new technologies were incorporated into the software, or additional features added, some would find the need to purchase the software license on an annual basis.

With the subscription model, the user is able to “lease” the software at a lower monthly rate. This also provides benefit for the software vendors, who now have a more predictable revenue stream. For software vendors who would offer a one time purchase option, would see huge sales once or twice a year (at the time of the release), with sales tapering off for the rest of the year. With the subscription model, they are able to predict recurring sales throughout the year.

This also enables the vendors to reach a wider audience, and sell to users who are not able to afford high upfront costs. Also with the subscription service, you are able to try out or use a product for a few months (for those who rarely need the product), and cancel without committing long term.

Lastly, I feel that it is very important to support the companies who offer these valuable products and services. If we find ways to cheat them out of their due compensation, this makes it harder for them to keep providing the service and innovating future products.