

Ask HN: free-personal/paid-commercial licensing model - huhtenberg

I'm considering adopting a licensing model that permits free personal use and requires purchasing a license for commercial use. Quick Google search brought up few examples:<p>* http://www.jetbrains.com/idea/buy/buy.jsp - Java IDE<p>* http://free.avg.com/download-avg-anti-virus-free-edition - AVG Antivirus<p>* https://secure.logmein.com/products/hamachi/licensing.asp - VPN service<p>Berkeley DB is (sort of) of this variety and so is the Aladdin Ghostscript license. Are there any obviously notable examples out there ?<p>Does anyone has any experience with this model ? From either side - as a licensor or a licensee.<p>Thanks<p>(edit) I though I'd elaborate on this a bit. First of all, the context is a standalone application. Its target audience is not dumb users, but the app is not very specialized either. It is equally useful to both the home users and IT professionals.<p>Secondly, my take on the above model is this. It is viable because it appeals to the users who are<p>* <i>capable of paying</i> (from the company budget)<p>* generally feel <i>obligated to pay</i> (due to internal IT practices)<p>* and who are easier to part with the money (as it's not their own)<p>In case of home users neither of these three points holds. The only way to facilitate the payment is to appeal to their conscience (by nagging, by enforcing the restrictions via some sort of DRM mechanism, etc) - very .. err ..  uncertain and effort-intensive endeavor compared to focusing on commercial users only.<p>Also, giving away fully-functional version under some sort of a free license effectively counters the need for hacked "full version" and eliminates the need for the licensing enforcement provisions in the application. Former helps to maintain greater control over the installation base and latter makes for a cleaner and simpler application.
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noodle
as a licensee, i would suggest that you not bother. too many people are
dishonest about it, and too many things blur the lines between personal and
commercial usage.

looking back at it, i've installed something intended for personal use, but
later on used it for commercial use, totally forgetting about the license
agreement. one product in particular, i can think of, i would've paid for if i
would've remembered. but they went under. probably from the license that few
paid for.

instead, i would suggest you offer two version, a "lite" version for free and
a fully-featured version for $$$.

~~~
huhtenberg
> _but later on used it for commercial use_

This is remedied by periodic re-verification of the usage purpose when in
personal license mode.

I am wary of lite/pro model, because it complicates the offering. Looking
through the feature comparison matrix may be quite confusing, especially if
pro version is packed with not so frequently used features.

Also, if too many features are withheld from the lite version, it will drive
users to use 'patched' pro versions. On other hand, if the lite version is
liberal, the pro version will suffer as its usefulness will decline. Finding a
balance depends on knowing your userbase and the userbase won't stabilize
until the lite/pro matrix is stable. So it's a catch 22.

~~~
noodle
> This is remedied by periodic re-verification of the usage purpose when in
> personal license mode.

this "might" be remedied by periodic re-verification. again, you're fully
relying on the individuals being honest and reporting their own usage.

i'm just pointing out that your revenue stream is going to be inconsistent.

with respect to lite/pro model, look at the 37signals products. they've
definitely made headway with the pro/lite model. they don't strip away many
features, but they also limit the product in other ways.

~~~
huhtenberg
> _you're fully relying on the individuals being honest and reporting their
> own usage_

Both models rely on this. Just keep in mind it's not a service, but an
application. There's no way to enforce certain usage, so it comes down to
whether you want dishonest users running a hacked version or the original app
(and thus allow them an option of going straight at some point).

~~~
noodle
there's a big difference between someone clicking "personal" on your popup to
be dishonest on the personal/commercial license model, and someone spending
the time to crack and reverse engineer your product to be dishonest with the
lite/pro license model.

i disagree with your assertion that there's no way to enforce certain usage.

~~~
huhtenberg
The difference is not as big as you might think. The end-user won't be
cracking the protection himself. He'll just create an (implicit) demand for
the crack and other people will create it. Absolutely all protected
applications are broken within few months (or weeks) of the release. Even the
most boring and virtually useless ones. That's a first-hand info from various
shareware devs that I personally know; and it's also quite obvious from a
trivial Google search for any given app.

> _i disagree with your assertion that there's no way to enforce certain
> usage._

There is, of course, a way to enforce the usage, but effective protection very
quickly becomes very ugly. Proper protection requires rootkit-like
functionality, some untrivial code encryption and self-consistency checks,
etc. And in the end it's all about fighting users that have their mind set on
stealing. That's just pointless.

~~~
noodle
as you say, its about fighting users that have their mind set on stealing. the
vast majority of people who actively steal your application have the mindset
to steal it, and almost definitely wouldn't have paid you anyway.

the point i'm trying to make is that the subset of people who are actively
looking to steal your application is smaller than the subset of people who
will passively steal it by not registering it as commercial. you're providing
the "do you want to steal this application?" button straight away yourself,
making anyone, whether their mind was set on stealing or not, have to actually
make that choice.

if you're looking to make money off of this, why would you even give your
users that option?

~~~
huhtenberg
> _the subset of people who are actively looking to steal your application is
> smaller than the subset of people who will passively steal it by not
> registering it as commercial_

Well, yeah, I hear you. Your conjecture is _exactly_ what I'd like to
validate. My guess is that it's not that much smaller and that a commercial
trialing period may steer passive stealing crowd towards buying.

Consider the case when a user is super happy with the application, the
purchasing process is streamlined and he can in fact afford buying it. Do you
think lots of people would cheat ? Especially considering he's a commercial
user and the $$ come from company's pocket.

~~~
noodle
i don't necessarily think a lot of people will cheat, but i think you're
lumping two different types of trust into one.

the one trust is trust that your users won't steal your stuff -- trust that
they won't actively look to break the license.

the second trust is the trust that your users will not be lazy or incompetent
-- trust that they won't passively or accidentally break the license.

with both personal/commercial licenses and lite/pro licenses, the people who
break the first type of trust will always exist. you'll have your pirates and
thieves no matter what. however, only with the personal/commercial licenses
will you have the second group. only with personal/commercial licenses can you
break the license without actively looking to do evil.

~~~
huhtenberg
It's a good deconstruction of the problem. I agree with the split. There are
two things I am counting on:

1\. Having just a single product is simpler to understand and thus it may
result in a larger user base. And so this difference would compensate for the
presence of opportunistic/passive cheaters.

2\. Parts of both passive and active cheaters are going to be swayed towards
buying if left alone for a while. Partly because of an expression of a "good
will" on developer's part, which causes some people to simply reciprocate.

Having further thought about this, I think it might help to have one or two
features under a commercial license. Something that's very easy to understand
and that is in fact useful only in a commercial setup. Like an access to a
tech support.

In any case - thanks for your input, it was useful and interesting. Gave me
some stuff to mull over.

------
emmett
30 or 60 day free trial, and after that an infinite-use key available for $X.
That's what convinced me to buy TextMate and many other software products that
I use.

~~~
huhtenberg
Ah, good point. I meant to say there _is_ a N days trial period if you are
uncertain which license you are going to use. This is effectively needed to
enable trialing the app in commercial setups.

~~~
emmett
I wouldn't make a distinction. Your work is worth something, charge for it!

~~~
huhtenberg
Well, there's more than one way to charge for it. I can try and charge
everyone $10 a pop or focus on a selected few and sell $1000 licenses.

There are few elements in play here including who's a target audience, the
feature set, the simplicity of the offering, the good will attitude towards
the users, the license enforcement issues, etc. The goal is to weight and
balance so them so that to maximize the revenue.

The model I am looking at looks very promising from many angles, so I wanted
to evaluate it from other angles that I am not perhaps considering.

