Free vs Paid Service Offerings
Virtually everyone likes online open source offerings. But at what expense are the publishers and merchants behind these free products and services producing and managing them? Let's take a look at how they survive and why switching strategies may prove to be more profitable for all parties.
Recently, a very popular SaaS company (more specifically, a website builder provider) disabled their service entirely. It was a simple, refined, and even hosted solution that people enjoyed using, and did so to represent their business in many cases. While not voting with their dollars, they had enough confidence in this company to not only sign up for their product, but make their software a daily driver.
When compared to tech start-ups like WordPress which, at this point, powers over 30% of existing websites, the majority of us would say that the above-mentioned are on their way. We'd be wrong. With sign-ups comes the need for servers, server maintenance, and so on. WordPress (or Automattic, Inc., rather) was smart enough to separate their offerings into two parts; self-hosted (i.e. a licensed albeit free version of their software to be hosted on your server of choice) and fully-hosted using shared cloud servers... at a cost.
Open source offerings tend to be community-driven, and, therefore, don't usually require a formal support team (beyond creating documentation associated with the product or service in question) nor is it readily expected given the "free" status. That said, while a healthy buzz is created and sustained, it doesn't generate income in and of itself; enter the paid model (that we, by the way, believe should be integrated, preferably from the point of launch).
The nameless company we referred to may well have attempted to be a pioneer within the website builder space... possibly envisioning offering a fantastic free product and service, with the goal of eventually selling consumer goods that target the same market. The problem with this strategy is that while the clock ticks, bills pile up, making a growing user-base a bitter sweet occurrence - when it should, in theory, just be sweet.
Who knows how some start-ups of similar solutions are able to surpass the first stages of development without making a cent? Maybe it's the reason why there are so many that begin in the founder's parents' basement or in a dorm room of a prestigious college (assuming their education is funded by their parents). As an entrepreneur, you need time to learn, test, and refine. That's a given. But without a means of covering expenses, for most, their dream project will be short-lived.
Luckily, with popularity comes opportunities. Therefore, not directly attaching a pricing plan to an existing and previously open-source product and/or service offering may not be necessary for those who aren't setting their sights on larger-scale success. Matt Mullenweg (founder of Automattic, Inc. and the creator of WordPress) could have focused exclusively on the open source portion of WP and simply made a fruitful living as a speaker to well-known Web development and technology events. Everything, as they say, is relative. And since it is, we think that given the fact that the nameless company actually hosted every single websites running on their platform... they had the intention of being bigger than WordPress, at least profit-wise (and perhaps in the short-term, as far off the mark as they seemed).
While there are countless nuances tied to any industry, the format that seems to work in most markets is generally the same; grow, earn, repeat. Would the world be a better place if free became the standard? Probably, but only if service offerings could be provided without the worry of making it to tomorrow.