Motley Fool:
Until a few years ago, business software companies earned their revenue by charging for up-front license fees and ongoing maintenance. Then Salesforce.com made a splash with its subscription approach, and now we’re seeing some vendors actually giving away business software. What does this all mean?
There’s plenty at stake in enterprise software. According to a report from Gartner, the North American market for business software totaled $12.7 billion in 2006. Its major players include SAP, Oracle, and Microsoft.
Now, a wave of new entrants want to disrupt the old guard’s dominance. Spiceworks, which recently landed $8 million in venture capital, develops network management software, helping to manage information technology (IT) assets. It’s a strong software offering - and it’s free. The company generates revenue purely from advertising, and so far, it’s signed up more than 120,000 users.
Even BT Group is jumping into the fray. The telecom giant has released a free business software suite to help users with payroll, sales & marketing, and HR. To make money, BT charges users for premium features, such as a 24/7 legal helpline.
Free offerings are certainly attractive to cash-conscious companies in need of automation. All the same, the freebies have some drawbacks.
Subscribe 
[…] Nenshad Bardoliwalla wrote an interesting post today onHere’s a quick excerptUntil a few years ago, business software companies earned their revenue by charging for up-front license fees and ongoing maintenance. Then Salesforce.com made a splash with its subscription approach, and now we’re seeing some vendors … […]
[…] You can read more here […]
[…] Nenshad Bardoliwalla wrote an interesting post today onHere’s a quick excerptUntil a few years ago, business software companies earned their revenue by charging for up-front license fees and ongoing maintenance. Then Salesforce.com made a splash with its subscription approach, and now we’re seeing some vendors … […]