TANSTAAFL, but we'll throw in the starter

1999-05-28

The article on Silicon.com about operating systems being given away for free has an element of truth. The fact is, all companies (IT and otherwise) dealing with technology are in an experimental phase. Given the fact that everything has a cost, the question to be answered is “what should be given for free to gain subscribers, and what should be paid for?” There will be different answers for different sectors. In retail, information and value-add service will probably be the major “free” differentiators. In the mobile world, provision of handsets has always been at an initial loss to the telco – this is a model being adopted by BskyB and OnDigital.

In the software and services world, things will be different again. At the moment nobody is really sure what will be given for free and what will be paid for. Maybe operating systems will be given away but like everything else they will have to be paid for somehow, perhaps through paid subscriptions to the services they enable. It is likely that there will never be one answer to this. Rather, business models will be chosen on a tactical basis depending on what people are prepared to pay for and what the competition is doing.

(First published 28 May 1999)