Free is the future of business
Chris Anderson writes in Wired:
Free! Why $0.00 Is the Future of Business
[...] What Mead understood is that a psychological switch should flip as things head toward zero. Even though they may never become entirely free, as the price drops there is great advantage to be had in treating them as if they were free. Not too cheap to meter, as Atomic Energy Commission chief Lewis Strauss said in a different context, but too cheap to matter. Indeed, the history of technological innovation has been marked by people spotting such price and performance trends and getting ahead of them [...]
This is a fantastic read. It touches on this great point - to treat things whose costs are falling as if they were free. In our context, bandwidth is always going up, so why not treat a Wi-fi hotspot as if it were free?
This means not worrying about trying to give customers free minutes on your network, when the costs of auditing and managing that are not free (that has to use extra time of your staff who should be doing the paid work of your business!)
Yes, look at Google, everything in perpetual beta, most of it free (unless you need more functionality in your Google Apps); Sun stuff, everything free (except hardware of course, or for software when you start to deploy stuff and need the performance). Of course it also has to do with tie-ins. Still, it seems to be a valid business model for a lot of companies. Unfortunately free is often perceived as “not good enough” or “there must be something wrong with it”.