Since the early eighties software developers began to look for ways to efficiently cover marketing and production costs for products and services delivered.
In those years it was easy to obtain “free” copies of computer games or basic-purposed enterprise software. The same companies "gave away" these copies as a way to advertise their products to their customers in hopes of them for eventually buying the "official" versions and thus generate relevant income for the company.
With the advent of the internet and specifically with the Web 2.0, this particular business model has started to rise again through the suppliers of products and technology services. Since the cost of generating these technology products is considered negligible compared to manufactured goods, technology gurus like Chris Anderson and Tom Evslin argued the benefits of it.
Specifically targeted for technology products, the model proposes, for example, to develop business software deployed through a platform that could be used by hundreds of thousands of users (economies of scale), this software will have basic functionality that users can used without any problem.
In theory this approach will allow the adoption of the service / product by thousands of users without need to invest in expensive marketing campaigns and relying heavily on word of mouth advertising.
Eventually, as the user adoption was complete, it could offer an improvement (upgrade) in the service or functionality of the platform. The difference is that now, this upgrade would cost for the user. This service would be able to generate income.
It is easy to imagine and understand this model if you think of LinkedIn, the social network that brings together the professional profiles of millions of users around the world.
However, the model has its critics who emphasize the feasibility of opting for this type of model, in which high costs are incurred early in hopes of generating income in the long term. There are many venture capitalists who prefer a model scheme that focuses on generating revenue as quickly as possible.
Whatever the case, the model is here to stay. At least until the cycle of Web 2.0 comes to an end and the model has to reinvent itself.
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