Five Hidden Costs of Freeware

Thinking about using freeware for some of your business operations to save your company money? Careful.

Only if you take the narrowest definition of “free” software – not having to pay for the licenses themselves – will you be able to categorize your new freeware as a money-saver.

Deploying, onboarding, and becoming dependent on new business software carries other costs. And with freeware in particular, some of these costs to your company could outweigh the benefit of getting access to the tool for free. In fact, the costs could also be a lot higher than if you’d simply opted for the paid version of the application.

We’ll discuss a few of these costs below. But first, let’s quickly examine why a software provider would give away any of its tools for free in the first place. Understanding the vendor’s motivations should clarify some of the key risks of allowing your business to become dependent on their freeware.

Why businesses offer freeware (Hint: it’s not for your benefit)

1. As a marketing tool.
2. As an open channel to their user persona for free feedback and product testing.
3. As a teaser to get business customers interested in (and eventually dependent on) their platform – so when that organization outgrows the limited free version, the provider can steer them to offer a more robust, paid solution.

These providers aren’t in the altruism business. If you’re not paying for their software, you’re not their customer, and making your team productive and happy isn’t their priority. So, yes, they’ll give you access to a bare-bones version of their software. But here’s how, over time, that freeware could end up costing you a lot more than the app itself.

A few of freeware’s hidden costs

1. Lack of capabilities

If there’s a paid version of the software your company is using for free, then your team will obviously be missing out at least some of the paid app’s key functionality. And those features could enable the workflows, create the efficiencies, or lead to the business intelligence that your company needs most from the tool.

Also, consider this: If your team is limited to the freeware functionality while your competitors are reaping all the benefits of the app’s enterprise version, are you really the one with the competitive advantage?

2. Less security and regulatory compliance

Let’s assume the software provider whose freeware you want to use guarantees its paid customers enterprise-caliber security for their corporate data. Do you think they make the same promises to their freeware users?  

What about regulatory compliance? Assume the provider has designed its digital infrastructure to keep its customers aligned with data laws such as GDPR and HIPAA. Let’s further assume the company tries to extend those compliance protections to the data of its freeware users. Do you think the regulators themselves would view your company’s use of freeware as fully compliant?

3. No guarantees

A company providing your business with freeware is under no contractual obligation to continue doing so for any time period.

Whatever time and effort your team spends onboarding and training on this new application – which could be substantial, because you’ll have no onboarding help from the provider itself – might prove a bad investment if the company pulls its freeware before you’ve gotten real value from it.

4. Less stability and reliability

Keep in mind that the provider whose freeware you’re interested in has limited resources for development, testing, and QA. To the extent they can deploy those resources to solve problems or continually improve the user experience, they’re going to prioritize the paid versions of their solutions – not the app they’re letting your team use for free.

Gentle reminder: As a freeware user, you’re not a customer. The provider might be devoting little or no resources to updating and enhancing this version of their solution that’s bringing in nothing in direct revenue. So, if your team encounters problems with the free app – bugs, uptime issues, etc. – don’t expect the provider to rush to resolve those issues.

5. No tech or customer support

Hey! How come we can’t get Support on the phone? We’re paying… oh, right. Never mind.

If they’re not earning any revenue from your company’s use of their app, you can’t expect the provider to commit any of its support resources to answering your questions or solving your tech issues.

And that’s our final word of caution against committing your important business workflows to a freeware application. If you think there’s even a chance your team might find its operations slowed or impeded by a software problem, do you really want them using an app that offers no support, no SLAs, and no way to get the issue resolved?

Be careful of what you don’t pay for

While freeware may initially seem like a cost-effective solution for your business operations, the hidden costs can quickly add up, potentially outweighing any savings. From limited functionality and security risks to the lack of support and guarantees, relying on free software can lead to significant challenges down the line. Understanding the motivations behind freeware offerings is crucial; these tools are often designed to entice users into a paid model rather than genuinely support their needs. Therefore, before committing to freeware, it’s essential to weigh these factors carefully and consider whether investing in a paid solution might ultimately provide greater value and stability for your organization.