IBM and The New York Times: Free Is Good

Free is good for business. At least, that’s what IBM and The New York Times said in so many words during the past couple days.

First, IBM announced it would offer Lotus Symphony – a suite of productivity software – for free. The media picked up the announcement, slung it around its shoulder and began playing the standard “Another-Shot-Across Microsoft’s-Bow” riff. But what a trivial tune when you consider the bigger picture: Big Blue, as traditional a software vendor as they come, saw long term business value for itself and its customers by putting out a substantial piece of software in the consumer space for free.

Of course, it could be argued IBM offered Symphony for free because nobody in their right mind would consider paying Microsoft Office-like money for it, but I think this decision runs much deeper. 

In offering Symphony for free, IBM basically acknowledges that the monetization of software by vendors must change since we now live in a world where the web has become people’s IT department. New technology providers (albeit not beholden to the same legacy concerns as incumbent vendors) have been effective at offering applications for free on the web. They make their money later on by offering a spiced up, or even an enterprise worthy, version of the software for a modest fee. If it’s purely consumer-based, they also can subsidize their experience with ads.

Meanwhile, the big advantage for technology companies (and the customers like corporate IT departments that get software from them) is how a free model uses the consumerization of IT to its advantage. For instance, rather than relying on a few enterprise customers to tell the tech provider what’s wrong with an application, the thousands or millions of consumer users who decided to access or download it will be more than happy to send that information along with more fierceness and rapidity than the enterprises themselves.

And, of course, there’s the Times, which announced it would end Times Select, a feature that required readers of nytimes.com pay to access the paper’s online archives and its op-ed content (i.e. Thomas Friedman, Maureen Dowd, etc.).  This makes sense for them on a variety of levels. In the most basic media sense, the more eyeballs that are drawn to its site, the more ads it can sell. This move should affect other papers, especially with Rupert Murdoch hinting that his most recent acquisition, The Wall Street Journal, could benefit from such an open model as well. 

Free and open is the new cash cow. Now it’s time to go out and milk it for all it’s worth.