Industry Analyst & Strategist

Is Open Source Freemium?

Today’s inspiration arrives courtesy of Old Man Dan at OMD Ventures, Freemium-ization of Society:

I expect free tiers for every new service. I didn’t know I had this expectation until I was outraged when met with “pay to play” services. Outrageous isn’t it? How dare they charge me for something without even giving me a taste! It’s made me wonder if the freemium-ization of everything has increased skepticism and delayed trust amongst our fellow humans.

BigScoots: Personal. Expert. Always There. That’s Real Managed Hosting.

This is a great question and really targets a couple of aspects of open source. First and foremost, open source is the ultimate free. Free as in beer. Free as in speech. There is literally never ever a cost, and the trial period is infinite.

But there is the upsell.

Open source is close to truly free only if I run it from my own local environment. Let’s assume a computer is a sunk cost and doesn’t count against free – I think that’s a fair assumption. So what are two critical additional costs?

  1. Time
  2. Hosting

Time is a critical factor and too many people really undervalue themselves in the open source freemium model. It’s also why so many freelancers and agencies are always trying to figure how to make a living / raise prices. This internal perception has permeated to many decision makers and the whole ecosystem suffers from an expectation of everything is free!

Hosting has got to be done and whether you are building out an “at home” server, doing the same at a datacenter, or utilizing more tradition shared hosting or modern cloud hosting, it’s not going to be free. The hosting market has many players which race to the bottom with pricing but even the cheapest still costs something (and often the cheapest will wind up stealing your time as well).

How about we change the advertising model around open source? We should stop talking about any free aspects since they confuse consumers and decision makers. Open source should start “pricing” typical installs. Let’s use WordPress as a good example and do some math with random numbers:

  1. Time: $50/hour
  2. Hosting $5/month

So with a WordPress install on an unmanaged server I should be looking at a $50 one time charge for getting it going, and $60/year hosting cost. So the basics of getting WordPress up and going from the above is $110 for year one. Note we are not talking about ANY development, customization, content, maintenance, etc.

The retail box price for WordPress should be ~$100. Which is actually crazy cheap, my off the cuff retail price would be $499.99. With over 450 million WordPress sites, that’s a lot of $$$!

Maybe we could get some of that money to the people actually making this open source stuff so free?

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