There’s No Such Thing as a Free Lunch

This week’s announcement from Microsoft that they will be giving away developer software free to students and the BLOG posts on the topic, left me with two very different opinions I wanted to share.   

First thing I want to point out was an omission by those folks, like CMS Watch “Microsoft’s new game plan: Target the dorm room.“, that says this is new.  Hello?  Ever hear of Microsoft Office?  For those of you who didn’t believe in computers back in the early 90’s, Microsoft gave away copies of Word and Excel to students free in their college text books.  Back in those days most companies were using products like WordPerfect and Lotus 1-2-3.  But adoption in organizations was slow because the computer was a scary thing back then.  So Microsoft went after the next generation and as more and more computer savvy graduates entered the workforce we started to see WordPerfect and Lotus 1-2-3 disappear.  The real lesson here to Microsoft, it’s too little too late.  With most of the JAVA tools already free for several years all they are really doing is bringing their products to parity.  It’s still a mindshare battle and one that Microsoft’s loosing. 

The second opinion came after reading John Komintez’s BLOG post “When Free Equal Profit.”  If his comments stayed around students, I would agreed whole heartedly.  I could see offering a Documentum developers platform to schools for free.  But when you’re talking about the professional world where you’re making money off the product, well isn’t that a tools of the trade.  When I was growing up my father was a house painter.  The only thing his clients paid for was the paint he put on the walls and the sweat it took to put it there.  He bought buckets, paintbrushes, ladders, drop cloths, the truck to lug it all around in, and the gas every week to fill the tank.  This came from the money in his own pockets, the money he got paid by the clients.  EMC does have a partner program and once you join you get access to their software and the price to join is no where near the costs to buy the software yourself.  That’s why companies join the partner program and I think it’s a fair pay-to-play model.  Yes it’s costs money every year, just like the Developer Network on Microsoft.  And yes you have to pay for it, just like your copy of Microsoft Office on your computer.  But in the end, there is intellectual and dollar value in software.  How many of us would let our clients share solutions we’ve developed for them with others and not pay us?  No one would. 

Am I saying how EMC/ Documentum treats the development community perfect?  No.  But this is the way of the content management space today.  They are no different and no better then anyone else in this space.  But that opinion is for another time.

6 thoughts on “There’s No Such Thing as a Free Lunch

  1. Marko,

    You have completely missed the point. Documentum has never made money from its dev tools.Oh they are licensed but the cost is a rounding error in every deal they have ever had. Documentum has never charged for lower dev lifecycles either. Their money is made on the production run time user or CPU counts. It has always been this way and despite the annoying practice of Captiva to charge for test systems – I don’t see the rest of CMA changing.

    There is a huge lost market in sales that could be driven by the thousands of curious professional developers who would love to try it out, develop expertise and push the better mousetrap that is Documentum Content Server. If you don’t think they are curious – just look at how many people have downloaded Alfresco, SpringCM, or any of the others.

    Pay to play is an antiquated model. The coding community will drive clients away from any vendor that doesn’t give them fast easy and free access to the latest and greatest. In the end, it won’t cost EMC a dime of market share and they might actually be able to fend off (a little longer) the new breed of true open-source players.

  2. Lee,
    I guess I’m throwing some salt in the dohyō.

    My main point is that every professional has investments to make in themselves to keep them ahead of the curve. Would you visit a doctor that hasn’t read a medical journal in years? I agree students should be given every advantage but we pros shouldn’t expect it. In fact, I would say our role is to pay for the software so that companies can afford to give it away to students for free. But we professionals decded for oursleve where we want to go.

    So let’s take it a bit further. Look at a specific field in a professional world, like a general practitioner and a neurosurgeon. Both of whom are doctors, except I would say one gets paid more than the other. It’s the same here. One hour of a developer’s time for Alfresco is much cheaper then it is for Documentum. Why is that? It’s called “free market supply and demand.” When you have a mass of developers available then the amount they can charge is less. And why are there many more developers? In the case of Alfresco you don’t need to make a large investment to become a practitioner and also that there are more developers than there are customers.

    So let me follow you logic. In the old tech world, for Alfresco having been around for just over two years 300 customers is impressive. But if I look at all the effect that free software should have, at a million downloads they should have a lot more customers. Where are all those deployments these developers and downloads bring to the table?

    Let’s get real. Microsoft is giving away its software because its technology is loosing market share. And while people want to think that it’s open source behind it, it’s not. It’s SUN. It’s economics. Documentum on the other hand is not its market share erode. In fact the number of real Documentum practitioners is small and demand is high for them. Why give it away if you don’t have to do so?

    Unfortunately in the real world you have investors and analysts, you need to make money and show ROI. Even with Microsoft’s ability to print money, they are only giving their software away to college kids. They still making professionals developers, like you and I, pay for the software as doing that would affect their bottom line. Open Source products have no investors hovering over them looking for their return. But what happens when an Open Source starts trading on the stock market? They start selling their tools. Just look at Red Hat. And we may someday get to see what Alfresco decides to do.

  3. And just who is MS loosing market share to? If they have lost share in any area (and I am not sure that is provable) it has been lost to technologies where the development tools are FREE!!

    You are right (in pointing out the obvious) that companies must make money. There is a well worn technique in sales called the loss leader. When I sold lumber ( WAY before I worked for the orange box) – we gave the studs away at cost so we could sell the doors and windows at bigger margins. This is no different ( in a hyperbolic sort of way)

    In software you have a set number of pieces to sell. The platform , the tools or the runtime. You can slice them up differently but that is basically it. If I give one away (dev tools ) I charge for the plaform (the OS) and the runtime (content server). This is a gross over simplification but hopefully you get the idea. My argument is that the tools probably don’t generate near the revenue that the lift in c/s sales would generate.

  4. I am pretty sure that one of the reasons that SharePoint became so popular was that you could download the evaluation version and try it out. Organisations did this and liked what they saw. OK it’s not exactly the same argument as free development tools but I think that lowering the barriers to Documentum development would be a good thing. I would’ve thought that doing so may help towards an increase in Documentum licenses and support contracts.

    I like Alfresco but I feel that it’s not the finished article yet. It’s not idiotproof like it’s commercial competitors in terms of configuration although I accept that the UI is generally very nice. Admins prefer point and click to editing XML. Perhaps once they get to 3.0 (sounds like being a major refactoring) we’ll start seeing more implementations of Alfresco.

  5. Yes in the early days Microsoft was giving SharePoint away with just about any software package. I’m not sure how many of the “user accounts” include those that got the software for free. But it did give people a chance to try it out. And psychologically when you get something for free you’re willing to deal with things not being perfect.

    But in the long run, you’re right. As SharePoint and Alfresco continue to give away their solutions for free it will force a game change in the Enterprise market as well. But I do think that the game may already be changing to one where the ECM vendors with the best partner network will win. This could turn the value back to the larger ECM vendors who have partner networks that know how to bring business benefit to their customers.

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