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The Hidden Costs of Free Software

One way or another, you always pay for small-business software.

My father used to tell me, "There's no such thing as a free lunch, son." One day, when I was feeling clever, I thanked my dad for the "free" lunch he had just bought me. He replied, "This lunch isn't free, son . you have to sit here and listen to me while you eat it, don't you?" Point taken.

Free business software is just like that. One way or another, you always end up paying for it. And there are all kinds of free software in the world. Some of it is free for a short time only. Some is free forever, only with limited features. And some is free because, well, it's really, really bad.

These days, there is so much free software available you could run an entire small-business office using it. There are free e-mail applications. Free word-processing programs. Free spreadsheets. Free presentation software. Free long-distance calling software. Free operating systems. And free instant messaging. About the only thing you can't get for free these days is tech support.

But it's important to remember that not all free software is created equal. And there is always a catch. Below are four of the most common categories of free software, and some of the gotchas to look out for with each.

  1. Freeware. According to the strictest definition, freeware is software that is quite literally free. And while it doesn't cost anything, it's built to encourage you to spend money on something else.
    iTunes is a great example of freeware. Downloading and using iTunes is completely free. And it's a great application. But it's designed to work best with an iPod, and to gently coax you into buying music and videos from the iTunes store.

    Adobe's Acrobat suite of software is similar in that Adobe Reader, which allows computers to open, view and print PDFs, is free and nearly standard on any personal computer. But if you want to create, manipulate and design your own layouts and graphically rich documents, you're going to need to purchase one of the many Adobe design software products, such as InDesign or Photoshop. Overall, freeware is a really good thing, even if it does lead to ancillary spending.
  2. Shareware. This is software that starts off being free, but doesn't end up that way. Often offered as a free download, shareware will either limit your functionality or cut you off after a set period. The idea is to give you a taste: First you try out the application, then you decide if you want to own it. Online video games are notorious for using this model. And there are hundreds of software services, everything from CD burner software to online content sites.

    One great example is AVG, the free antivirus software. You can download a completely free version of the software, and it's quite effective and reliable. But it doesn't quite do all the things you need to be completely protected. It makes you want more, and to get more, you have to pay.
  3. Adware. Advertising-supported software has been around for years. The concept is simple enough: You get a free service (usually Web-based) in exchange for putting up with ads that are sometimes subtle, sometimes not (commercial TV, for instance, is based on this model).

    For example, there are dozens of free e-mail applications in the world, as long as you don't mind having pharmaceutical ads ride along the bottom of every message you send. Google, Facebook and every internet e-mail service uses this model. For business purposes, it's not the most professional look. And when you're trying to market your brand, it helps when e-mails come from an "@yourcompanyname.com" address rather than a Yahoo or Gmail address.
  4. Open source. Linux is the most famous example of open source. It is an operating system that was jointly developed by thousands of different developers for no compensation. Many of them never met. They simply went online and added a few lines of code at a time. Eventually, the software was so good that big businesses were using it for everything from hosting Web sites to running business operations.

    But most small businesses probably have no idea how to use it or even where to get it. That's because open-source software is usually only for the bravest and geekiest among us. It's true that you can get open-source versions of nearly any kind of software, including office productivity applications like word processing and spreadsheets. But it's also true that these applications require a level of technological sophistication that few small businesses possess. That is not to say that all of them are hard to use or incompatible with more popular commercial software (though many are). It's just that knowing how to find it, install it and maintain it can end up costing more time and money than just buying commercial software in the first place.

That's the rundown on free software. My suggestion is to stick with freeware when it's available. And use open source if you have a geek on staff. Other than that, pay the money and ensure you have a product that's widely accepted in the market and compatible with your customers or business partners. Because, while my dad may have been right about there being no free lunches in this world, there are lots of ways to get a good meal at a reasonable price.

Dan Briody is the author of two books and is the former Executive Editor of CIO Insight Magazine, a leading publication for information technology managers. He is also a frequent contributor on technology topics for Wired, Inc. and Business Week magazines.

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