Google, Skype, Firefox, Kazaa and others have introduced a new way of selling technology: giving it away.
The competition may try to make a better product at a lower price, but if the lowest price is free… Don’t wait! Do it before a competitor adopts this strategy.
This business model is subversive and is totally destabilizing the system. It’s making a big impression on consumers who can research, read the news, make phones calls, and listen to music for free (1).
What is surprising is that this economic model is working and is giving rise to monopolies that are profitable and friendly. The owner gives software or a service in exchange for the client’s confidence, with downloading or a visit to the site a way of “voting” for the product. By following this strategy, Skype has become a worldwide success in less than a year with more than 10 million downloads.
We can take this further and ask ourselves about the future of Microsoft, Oracle, BEA, … All have a good product and client base but are threatened by competitors who offer quality products for “free” (2). These companies won’t disappear, but they will have to cope with a long and painful decline, just as HP and Compaq did when faced with Dell.
Specialists retort that paying for competitors is better. Even if this were true, for how long will it last? It must be remembered that free alternatives are present in spite of a lack of promotional means.
Firefox has won the media battle! The (re)birth of “phoenix” foreshadows a stunning success!
__________________________________________
(1) Free newspapers are experiencing similar success.
(2) Linux, Open office, mySQL, Apache, …
(3) Compared with the billions of Microsoft.
Comments