Many companies have spent a great deal of money to develop a software product, only to see it bomb in the marketplace. To add insult to injury, frequently a rival of theirs receives the bulk of the revenue in that category, and uses those revenues to better compete with them in other fields. Frequently, even if the company would give away their product for free, no one would use it, since customers want to be compatible with the dominant software in the category. No one wants documents that others would not be able to readily read and modify. Furthermore, giving away your software for free would only convince people that it is in fact an inferior product.
To solve this problem, I propose something called scorchware, named after the famed scorched earth strategy. If you aren't making money in this category, make sure no one else will either. The key insight is that you can use the technique of bundling even if you have nothing to bundle it with. Simply find a friendly company to bundle it for you.
The way it would work is as follows. Keep the retail price of your product high, so people perceive it as having a high value. Meanwhile, tell computer manufacturers that they can distribute your product for free, or condition that it comes preinstalled on every machine they sell. Telling a non-competing software company that sells a large and expensive software package that they can freely bundle your software under the same terms would also work. Since your product has a high list price, companies would be providing a real value to their customers by including your product. (If your software were free they would be providing no value by incorporating it, which is why most computers don't come preloaded with Open Office and other freeware.) Ironically, you can sometimes better distribute a product by not making it free. Meanwhile, once everyone has a copy, customers can use the product without worrying that others won't have the software necessary to interact with them. People will become more reluctant to buy the dominant product, since they already have something similar that others can also use. This can force your competitor to either cut his price or face a reduction of his volume, either one of which will drain his revenue and thereby hurt his ability to compete.
One company that could especially gain from such a strategy would be IBM, which could turn its Lotus Smart Suite into scorchware as a way to hurt Microsoft Office. That was the example which first caused me to think along these lines. Please read my full reasoning of why I think IBM should do this before responding. While this is an old idea of mine, I believe it to be a powerful one. I'd love to hear your feedback.
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This is exactly how Microsoft has remained the dominant force in the operating system market- they have given away their product at discount prices bundled with more expensive items(computers) while charging insane prices for the same product by itself. This method does not benefit the consumer in any way, nor does it foster competition. The only benefits are that the entire system now depends on your product, and you now have guaranteed profits until a way to get along without your weakly engineered product is developed. Note that both of these only benefit the developer, not the consumer and especially not the country.
This is similar to what IBM did with OS/2 3. They gave it away to manufacturers. This worked pretty well in Germany I believe, where the top 3 manufacturers took it. But they may have taken Windows too, and Germany on its own didn't give IBM enough users to reach critical mass.
Also Sun have given away 60m java development toolkit downloads. In an effort to undermine MS C++ in particular. http://java.sun.com
Open Offices source code scorches the earth for IBM. IBM is right to bide its time with minor upgrades to 123 etc. It will only have a future, if something goes spectactularly wrong with OO.
Large software manufacturers including Microsoft, Adobe, etc. already do this by making their products easy to pirate and turning a blind eye to piracy at the consumer level. They do enforce license compliance at the corporate level, however, which is more cost effective (up to thousands of seats worth of licenses can be audited in one location) and easier to blackmail (corporations have more money).
On the enterprise level IBM does this today with Tivoli. They give Tivoli away for almost nothing to big companies and make money on the services to turn it on. This has been eating away at BMC, HP Openview etc for years.
On the consumer level, when any good software idea becomes pervasive Microsoft will be bundle a free version with the operating system or Office. This has been eating away at software innovators for years because as soon as an idea takes off, Microsoft makes it a commodity.
We have software patents to protect innovators, but your average software purchaser (enterprise and consumer) makes software purchase decisions on emotions and then justifes that decision on vendor provided criteria. This is why 80% of all software becomes shielfware in 18 months.
Bottom line .. don't buy any software, just wait for it.
On the enterprise level IBM does this today with Tivoli. They give Tivoli away for almost nothing to big companies and make money on the services to turn it on. This has been eating away at BMC, HP Openview etc for years.
On the consumer level, when any good software idea becomes pervasive Microsoft will be bundle a free version with the operating system or Office. This has been eating away at software innovators for years because as soon as an idea takes off, Microsoft makes it a commodity.
We have software patents to protect innovators, but your average software purchaser (enterprise and consumer) makes software purchase decisions on emotions and then justifes that decision on vendor provided criteria. This is why 80% of all software becomes shielfware in 18 months.
Bottom line .. don't buy any software, just wait for it.