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For example, I know that open-source versions of IL readers/writers exist such as Cecil, and Microsoft's (closed source) CCI. What would it take to get developers to pay for something that is already freely available?

I have always wanted to start my own ISV by writing my own tools and selling them in the open market, but it's hard to gauge the demand, given that free alternatives already exist. Does anyone else have any successful experiences selling a commercial version of an open-source product?

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    Theres OpenOffice, so why do people still use Microsoft? Cost isn't always in money, and not all software is written equally. If your tools get it done better, it will sell.
    – user7007
    Feb 15, 2011 at 1:59
  • I think an attempt to sell a commercial version of an open source product is doomed, from the very attitude. Come up with another description of what you're doing.
    – David Thornley
    Feb 17, 2011 at 19:29
  • I do not like the open office <-> m$ office comparison. Microsoft Office prevails because microsoft gives it to academia at such a disgusting discount that they remain embedded in the new graduates. When they enter workforce they say "I know Office so I need office for my job". Openoffice suffices as far as I am concerned. The only problem is compatibility with business who rely on microsoft office. Unless you are a "MS Office Power User" (Idk what that means aside from too many animations on your ppt's) then Open Office will suffice your Office Suite needs entirely.
    – Chris
    Feb 17, 2011 at 19:41

6 Answers 6

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My personal opinion: Quality. If your software is better than the free alternative, I would pay for it.

Think about your target demographic. Probably professional programmers, right? (What other group of people is willing and able to buy such a specialized tool?) If you save them time and frustration, you make their jobs easier.

People can justify spending $X dollars if it means Y% increase in productivity. It's much harder to justify spending $0 for 0% increase in productivity.

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    I agree with this, but the problem is getting your potential customers to recognize the inherent value you are adding. Instructional videos are an amazingly effective tool for getting your point across.
    – Peter Rowell
    Feb 15, 2011 at 2:27
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    I paid for Beyond Compare because it did exactly what I needed and saved me the (considerable) trouble of writing something similar myself.
    – PP.
    Feb 15, 2011 at 8:31
  • There are several aspects to quality: Better features, better stability/fewer bugs, better documentation, faster support. For example, the free NTFS-driver for OSX is a lot slower than the alternative, so I pay.
    – Jonas
    Feb 15, 2011 at 15:24
  • @PP01: I did the same thing. Great program. Worth every bit and more of the $25 I paid for it.
    – Peter Rowell
    Feb 16, 2011 at 6:20
  • I would pay again and again for any tool made by Red-Gate. Their stuff just does a better job than any free tools for SQL Server.
    – HLGEM
    Feb 17, 2011 at 19:32
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Quality is important, sure, but you also need marketing.

People are not perfectly rational. They suffer from many, many cognitive biases including:

  • The Bandwagon Effect - We're more likely to choose what other people choose ("No one ever got fired for buying IBM").
  • Confirmation Bias - We like to make choices that confirm what we already believe versus change or expand our beliefs.
  • Hyperbolic discounting - We favor smaller benefits that happen immediately versus larger benefits that take time to materialize. This is hell on new products since you have to learn how to use them before you benefit.

Marketing professionals know all about cognitive bias. It doesn't make them angry or uncomfortable. Instead, they find ways to use and defeat cognitive bias to get a product into their customers' hands that they know is better. (Okay, not all of them know it's better. Some are just manipulating people for profit. It doesn't have to be that way, though.)

Run a few plays from the marketing playbook:

  • Don't make apples-to-apples comparisons between your product and free alternatives. This prevents anchoring biases. Example: SourceGear Vault offers features that are similar to SVN, but you'll find no mention of SVN on their web site.
  • Share behind-the-scenes information with your customers. Blog about your schemes, challenges, and triumphs. This likely has no impact on your customer, but it tickles their information bias. Example: Peldi from Balsamiq shares revenue information. This doesn't change the quality of his product, but it makes his customers feel intimate and well-informed.
  • Make it so your potential customers can't lose. Offer a money-back guarantee. Offer your first version free. Tell them you won't stop until they are happy. This addresses loss aversion. Example: IBM will compute your SOA ROI so you're sure you will actually make money from buying their products.

With a little luck, you can navigate customer biases until nothing is left but post-purchase rationalization.

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I have that experience, but it was 30 years ago. Back then the only source level debugger for UN*X was a thoroughly broken POS called sdb. I wrote one for myself, called cdb, and then ... suddenly I was in business: HP, Siemens, and about half of Silicon Valley. The arrival of dbx a few years later seriously impacted my business and I sold it off to Green Hills Software.

Today? Wow, that's gonna be tough. Programmers are notoriously cheap about stuff like this because they say, "Hey! I could write that in an afternoon!" In reality, it will take them 20-50 times longer than they thought, and it's going to be broken in innumerable ways, and other people will sort of, kind of use it, and then it will die along with 100,000 other projects on SourceForge. But it's enough of a counter-force that it makes it very difficult to make a living at this.

My suggestions is to do it for love (it is Valentine's Day, after all) and then put it on your resume.

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Even if your software does the same job as a free software, if it is inherently more useful, of a better quality, and is more enjoyable to use, then people will pay for it. An example I was thinking of has already been mentioned by @PP01, Beyond Compare. I paid for this software because it is better than all of the others. Now if only it was available on Mac, I would buy it again.!

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What software tools do people pay for now? Go to their websites and see how they market them and what their customers have to say about them. Talk to people who bought them and see why they were willing to pay. Download their free versions and compare to the open source stuff you find to see why you might choose them.

Do the market research required to see what causes people to buy when there is free stuff available.

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I think that, as others have said, if what you offer is better than the free alternatives then some people will buy it. One thing thought that I think it's important to remember though is that freedom is a feature. If the programmer offers features X and Y that are not offered in the free program, but you only offer X, it might still end up being in the developers best interest to use the free program, since they can access the source code and add both features X and Y.

On the counter side of that, one very valuable feature that free software often lacks is documentation. If the programmer has a much easier time figuring out how to use your library/application compared to the free version they might be more inclined to pay you for your product.

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