The future of software is free

Microsoft has to change.

By: Gaith S

The internet has allowed the introduction of new model of software which is web based, or Software as a service SaaS, where in order to use an  application all you need is internet connection and a browser and you do not need to download any thing on the PC.

SaaS is evolving, Google introduced Google’s apps which are documents and spread sheet,  documents which are a web based word processor based in technologies developed by writely a company which Google bought last year, now Google offers its document and spread sheet web based applications for free, a direct attack against Microsoft’s office.

Google’s business model is to offer these apps for free making money from advertising, and to make money it might do the same why it did with Gmail: a spider reads the content of the document and provides on the right side of the page contextual ads related to the content of the document. A lot of people might not be happy with this for privacy reasons, but on the other hand they get free applications, and look at Gmail; people were complaining about its privacy but  now it is used by 10s of millions of people.

So to spot a trend all applications will be web-based and all of them will be free and ad supported. This might be hard for some applications but the trend is going that way, and you will see more startups has this model, I was one of them back in 2000.

Microsoft –MS- spotted that trend, and it is trying to get into that space and that is why it bought of ad company aQuantive on Friday for a whopping $6 billion dollar purchase, but analysis think that MS it still needs more advertisers and can only get them through a big acquisition like yahoo, never the less MS has nowhere near enough advertisers — i.e. 300,00 to 500,000 — needed to compete with Google or Yahoo.

Google and yahoo are the prime companies positioned to offer SaaS for free and sponsored by ads, startups can relay on google’s Adsens, but their hope is to be acquired by one of these giants.