March 18, 2002

Selling Software for Profit - Is There any Money in it?

I found an article while I was surfing around this morning (courtesy of LinuxToday), and it got me thinking. Shawn Gordon of theKompany is probably not all that different from a lot of folks who are trying to straddle the open-source/commercial software world, and his frustrations are certainly not unique.

There was a similar thread on Slashdot this morning where the discussion focused on getting people to actually pay for shareware. My own personal feeling is that shareware is, and pretty much always has been, a bust; you never get as much out of it as you put into it. And there is so much really good *free* software out there right now that shareware really doesn't make much sense.

So I'm wondering if there is really any money to be made in selling software for profit any more. Even Microsoft, with their monopoly on desktop operating systems and their vast installed base, is having trouble getting people to upgrade and pay for new versions of software; this is the motivation behind their move to a subscription model. It's the only way to sell software at a profit nowadays.

I happen to believe that software is a commodity -- no one in the industry likes it, but it's a fact. Operating systems, word processors, games, databases...there's too much good free stuff out there to allow people to charge for only marginally-better (or even worse) commercial stuff.

Shawn Gordon can blame the GPL all he wants (and you watch who he blames when theKompany goes broke...), but the truth is that it is the times that have changed. This isn't the 1980's anymore, when companies could charge whatever they wanted for software and be sure of getting it because there were no real alternatives.

No one ever guaranteed software vendors a lucrative business. They chose to get into the bit-peddling business, and it's no one's fault but their own that their business models are no longer sustainable. In this they will share the same fate as the music and movie industries -- either adapt to the new marketplace or die.