By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research
Published: 1st April 2014
Copyright Bloor Research © 2014
In the BPM market, a number of vendors offer certain parts of their product stack free. How do these companies use this to generate revenue? To answer this question, you have to understand the licensing model of the 'free' software.
One business model is an Open Source Software (OSS) approach akin to the way Linux works. You download a basic edition, which is free with limited features. A good example of this approach is Bonitsoft’s Bonita BPM. Bonitasoft offer 4 different editions: Community, Teamwork, Efficiency and Performance. The Community Edition offers modelling support as well as import/export and validation capabilities. The other editions then cost more and provide further capabilities such as team collaboration, document generation and, with the top 2 editions, business process templates. Bonita BPM Community Edition also contains support for connection to other applications but, once again, a limited amount. The other subscription editions provide further run-time capabilities.
The other alternative, certainly in the BPM world, is based on the software vendor offering some part of their suite as a free download or a set number of days trial.
In both cases, the license is for a single user and you can only develop and automate your models, not run them live. Examples of this approach include:
There are also a number of freeware products that are basically BPMN editors. Examples of these include:
The 3rd Business model—Freemium
I only know of one vendor offering this business model which is Bizagi and their approach is worth a blog in its own right. The company has three products—Process Modeller, Studio and Server. The first two are both offered as freeware with no limit on how long you use them. The 3rd product, Server, is the runtime engine that deploys the developed process from Studio. The Server licensing model is based on named users, so you need a separate CAL (Client Access License) for each unique user.
Licensing—make sure you read the print
I asked Bloor’s main analyst on freeware licensing and governance, David Norfolk, to comment, “One important point is that OSS isn't license-free, just not charged for. One still needs to track OSS community licenses and their provisions—I have heard of predatory lawyers tooling up to identify companies breaking OSS licenses and (in effect) blackmailing them. Not knowing what OSS licenses one has signed up for and what they mean is a serious governance issue. Software asset management is an issue one must address even with community edition stuff. If it is free alpha software and does happen to have, say, a serious security flaw, one must be able to find out who is using it and where, very quickly. I would point out that none of this is any worse than for commercial software, except that you don't overlook it quite so easily with commercial software; and the commercial vendor is more likely to try and hide its serious security flaws”.
So make sure you know what licences you have signed up for.
These business model approaches provide the capability for organisations to try a product without investing much money to solve particular business models, whilst at the same time not 'fixing' you to a single supplier. By being free to download and use, what they do is to get you used to the way a product works and then when you want to implement what you have designed, you have the freedom to choose how you will do it. Because of the use of various software standards, with therefore the underlying product architectures being built upon similar technologies, you can transfer from one product to another with much more ease than in the past. Being 'free' to develop with, the users learn the technology before making the financial commitment; this should help them make the right choice. Of course the vendors hope that because of your familiarity with their product you will choose to use their licensed software to implement on.
So how do these vendors make their money? Well it is less costly in terms of sales process costs as often the products are 'sold' through word of mouth from one user to a friend or colleague who then downloads the 'free' edition to help solve their issue and then decides to go live on the vendor’s licensed offering. The major marketing activity of the vendors is to get good customer sales stories. This now can mean the community Q&A sites as well as the normal customer stories we are all used to.
It is important however for the vendor’s to capture enough details from a free downloader that will allow them to contact them and ask how they find the product. Investment in models of generic business process such as invoice production or acquiring a new customer can also help by getting users to the point of developing their final solutions far quicker.
 I found when I tried to register that, although the form says that details of your Twitter account are not shown as required, when you hit the register button you get an error message to say your Twitter account details are mandatory. Firstly, I find contradictory details on registration show that the online registration system hasn’t been tested properly and, secondly, what if you don’t have a Twitter account or don’t want to share it with a supplier!
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