Software development has gone very far from where it was during the Windows 98 days. Back in the there was likely at least one premium application for getting a specific task done, and there were opportunities to make new applications to solve new problems.
You want to do word processing? MS Office was practically the only choice you had if you really want all the basic features with a familiar interface. Now times have changed, though not polished as MS Office, there are LibreOffice and OpenOffice which pretty much offers everything all an ordinary user would want. Want to create a website? There is WordPress with thousands of professionally looking free themes.
Developing an offline solution for a problem everyone wants is no longer profitable, if the development demands huge investment. Services like GitHub have given a new life to the open source development community. Huge corporations are funding open source projects. If there is something that a large number of users want, it is highly likely that there will be an open-source product to address that problem.
Another problem with the business of offline software is piracy. Times have changed to a point where if your product is famous enough for a user to know about it, they could find and download it from the Internet.
Companies are changing their tactic; Microsoft introduced Office 365, cloud version of MS Office Adobe introduced CreativeCloud, online version of their popular CreativeSuite which includes Adobe PhotoShop and Adobe Illustrator. Unlike offline products, which offer unlimited usage after one time charges, online products are offered on a subscription basis, renewing its license each year.
Application software have come too advanced that an average user can get by using a software which has been outdated say – five or six years ago. More and more advanced features have been added to the software that only a few people care about. Even MS Word 98 could handle all basic word processing needs for an average user, more or less.
The Open Source movement has gained momentum mainly during last decade. What was changed?
The growing popularity of open source movement has to do with the growing number of people who are both competent and willing to do work for free. Two decades earlier there were only a few thousand professional software programmers in the world. Now there are millions. Many of them are employed by big corporations and want to return something back to the community. They do it by contributing a small portion of their time doing what they do best – coding.
Now, that’s just a small portion of the open-source developers. Other segment is programming enthusiasts who are employed or doing business in fields other than IT. They contribute to open-source projects for their passion of programming.
Despite all these support from open-source developers, major open source projects are backed up by major corporations – like Google Android, Ubuntu, Adobe PhoneGap, RedHat Linux, etc. Full time programmers work exclusive for each of these projects making the end product looking as professional as its commercial counterparts.
Advertising: Advertising of third party products or services is rarely used in computer applications, but the business model really took off with the rise of Android platform. Titles from major companies like Rovio were made available for free with advertisements. Although popular apps and games make profit from advertisements alone, an average developer is less likely to make a living by making ad-supported apps.
Freemium: Freemium is a relatively new business model, like a refined version of shareware programs. Popular application come into my mind is AVG Antivirus which offers basic antivirus protection for free. It is available for Windows, Mac and Android. For advanced features like firewall the customer has to purchase their license.
Freemium is a great way to make a large customer base quickly, especially if the company has a quality product like AVG. Only the problem is, there are other companies which offer the premium features of another company for free. In this case Zone Alarm which is a well known firewall developer offers its basic features for free. As company who focus on firewall I believe the firewall features will be much better than that of AVG. For Zone Alarm, it is the virus protection that should be purchased as advanced protection. As you can see, if you don’t mind installing both products you have both virus protection and firewall for free.
Freemium could be used as launching pad for creating a brand, but most of the users of these products are not willing to pay, the customers will keep using the free features as long as they are free.
Open-source is the future of software development. Developers can embrace it, or become obsolete. There will always be demand for businesses which are built around open source products. Products and services those are used by very few individuals in specific niches continue to generate work for developers. It is less likely to make an open-source application software for a cruise-control. But, for generic applications the future is open-source, whether we like it or not.