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What is Shareware?
by Dan Housley
What is Shareware?
Shareware is software that you can try before
you buy. Shareware is a kind of marketing method
for software. Software developers post trial versions
of their software on websites. Consumers can then
download the trial version to their computer and
evaluate it. If the consumer likes the software
they can purchase it. Shareware is also called
try before you buy.
Today almost every big software company including
Microsoft, Winzip, and AOL use trial versions
or a form of shareware to market their software.
Who invented shareware?
Andrew Fluegelman, and Jim Button, (also known
as Jim Knopf) accidentally invented the marketing
method shareware. Surprisingly it was started
at about the same time by Andrew Fluegelman in
Tiburon California, and by Jim Button in Bellevue,
Washington. Jim Button started making simple programs
and it soon became a hobby for him.
At the time the IBM PC came out
Jim was working at IBM. Jim Button shared his
database program with fellow IBM workers. The
program spread between workers and they began
sharing the program with family and friends. However,
it was getting hard for Jim Button to send messages
to users to tell them about improvements to Easy
File. He found a solution to this problem. Jim
Button put a message in the program that told
people to please send him $10.00 if they wanted
him to contact them about any updates to Easy
File. The message encouraged the users to continue
spreading the program around.
Meanwhile in California, Andrew
Fluegelman, was writing PC-TALK. He faced a similar
problem and posted a very similar message to Jim
Button's. Jim Button contacted Andrew Fluegelman
and Andrew Fluegelman really liked Jim Button's
program. Andrew asked Jim Button if he would rename
Easy-File to PC-File so that the programs could
be bundled. They also decided to ask users for
a $25 dollar donation. The software remained fully
functional for unlimited time, regardless of whether
the user paid.
Unlike other programs, this program
could be tried prior to purchasing whereas other
programs had to be bought before you even knew
what it was like. The unusual marketing method
caused a lot of free publicity for PC-File and
PC-Talk, which helped increase the popularity
of the programs. Shareware was finally born!
How was this unusual marketing
method named shareware?
Jim Button, Andrew Fluegelman, and Bob Wallace
another popular developer, all had ideas on what
to name this new marketing method. Jim Button
wanted to use the phrase 'User Supported Software'
to describe shareware. Andrew Fluegelman wanted
to use the term Freeware, but legally people weren't
allowed to call it that without his permission
because he had trademarked the term. Also, freeware
wasn't descriptive because technically the software
wasn't free. Bob Wallace wanted to use the term
Shareware. Another developer named Nelson Ford,
held a contest in order to determine what the
name would be. The winner was… Shareware!
Distribution.
Distribution was critical to a software developer's
successs. Developers needed to spread their software
to as many new places as possible. Richard Peterson
started as a disk vendor in 1982. There were so
many versions of software some people were charging
to find a certain version Richard Peterson created
a diskette with all the versions of software.
He copied it and sold the disks for $6.00 each.
He called his company PC-SIG. Unfortunately consumers
thought that the disk vendors were selling registered
versions not trial versions. Jim Button and other
software developers were furious because they
felt that PC-SIG misrepresented their software
applications. Developers protested by refusing
to give away their software to anyone who wanted
to sell it.
Eventually shareware developers
and disk vendors worked together and came to an
agreement. The developers would get a percentage
of all the disk vendor's sales. The shareware
developers also realized that the disk vendors
were selling their software to places that the
developers had not been able to sell to before,
and with more trial versions there was a better
chance of people buying registered versions of
the software.
How did BBS effect the shareware industry?
BBS' increased software distribution, greatly
impacting the shareware industry. A BBS (Bulletin
Board System) is an electronic bulletin board.
A person would dial out via modem, on a phone
line, to a BBS and could send and recieve information
on the bulletin board. Normally a shareware developer
would have to distribute his/her software by handing
out, or mailing floppy disks. That changed when
the BBS was invented. Shareware developers could
now post their software on a BBS and people could
come and download the software to try out. Today
many people still use Bulletin Board Systems.
AOL is a modern BBS.
Did the Evolution of operating
systems affect the shareware industry?
As technology evolved and improved so did software.
This resulted in Microsoft improving and upgrading
their operating systems. This created a number
of problems for the developers. When Microsoft
released a new operating system, called Windows
3.0. Many programmers who had developed their
programs for DOS had to rewrite their software
so it would run on the new Windows operating system.
New computers were sold with the new operating
systems meaning that the developer had to upgrade
their software to ensure future sales. Microsoft
then released Windows 95. Once again the programmers
had to rewrite their programs to perform on the
new platform.
Disk Vendors come to an end.
During 1993 the sales of diskettes drastically
fell. As there were too many companies and not
enough money for all of them to have a successful
business. Even PC-SIG went bankrupt. Due to the
distribution changes, disk vendors were no longer
a viable means to distribute shareware applications.
What is the Internet?
The Internet is a connection of computers all
around the world. People on the Internet can view
information from anywhere on their home computer.
Internet surfers can go to a web page in Australia,
China, or even Russia. The Internet increased
communication and opened web surfers to lots of
new information. On the Internet there are downloads,
auctions, information, and items that you can
buy through secure online ordering. The Internet
took time to evolve into what it is right now,
it began as a simple way to share information.
Why did the Department of
Defense invent the Internet?
The Internet was started in 1969 by the US Department
of Defense. The Department of Defense linked all
the super computers in the USA together. At first
they linked them like a bridge's supports, but
they soon realized if one super computer was hurt
in some way, they would have communication difficulties.
They had to link the computers together so if
one computer was destroyed they would still be
able to communicate. They called this network
of computers ARPANET. Throughout the years the
Internet's name has changed several times to names
like MILNET and NSFNET. Some of the current nicknames
for the Internet are The Net and The Web.
Did the Internet have an effect
on the shareware industry?
The Internet has had a huge impact on the shareware
industry. In fact many industry professionals
credit the Internet with having the biggest impact
on the shareware industry's growth. The Internet
has helped shareware developers by increasing
their distribution and reach.
The Internet contains many shareware
or software download sites. A shareware download
site is a website that has many software programs
available for download. Like the BBS', the Internet
was a great way to advertise. As the Internet
has grown, so has the distribution network for
software developers.
What does S= =R mean?
Up until this point shareware versions were the
same as the registered version, so regardless
of whether the consumer paid for the software
the software worked the same. S= =R was adopted
by the Association of Shareware Professionals
(ASP) in the early 1990's. In the acronym S= =R
the S stands for Shareware Version, (trial version)
and the R stands for Registered Version. The Association
of Shareware Professionals wanted the shareware
and registered version to remain the same. However,
developers were finding that by placing limits
in their shareware version their sales increased.
When the shareware version was the
same as the registered version consumers did not
have a lot of incentive to purchase the registered
version of the software. After the ASP established
the S= =R rule there was a huge decrease in sales
for shareware developers. Many authors went out
of business as a result of the policy. Many developers
also left the ASP. The ASP realized their mistake
and repealed the rule. Soon many developers began
adding limitations to their software, which encouraged
users to buy. The shareware industry was thriving
again and the Internet began making sales rocket
sky high!
Freeware vs. Shareware.
As you know shareware is a marketing method for
software. Freeware is also a way of marketing
software. However, freeware is free so the developer
does not ever request any money. Shareware is
free to distribute but cannot be used for an unlimited
amount of time, unless the developer is paid.
Freeware can be used an unlimited amount of time
and can be freely distributed; payment is not
required. Many developers use freeware to draw
attention to their shareware applications.
What is a Virus?
A virus is a dangerous computer program, it is
made to cause damage and unknowingly to spread
to other computer systems. A typical virus is
one that attaches to a computer program. The virus
will cause damage if opened, and will duplicate
itself whenever the program is opened or if it
is emailed to someone. Some viruses can erase
files, others cause programs to not function properly.
What a virus can do to your
computer
A very dangerous virus is called a Trojan Virus
it can cause security breeches that allow people
to look at information on a user's computer without
the user's knowledge. Another kind of virus is
also capable of attaching itself to emails. These
viruses are easily passed on. This kind of virus
is known as a Macro virus. Some names for this
kind of virus is Concept, Nuclear, Showoff, Adam
Wazzu, and Laroux. To block these viruses and
others (such as Lovebug, Blaster, Michelangelo
and Circam) surfers need to have an updated anti
virus system on their computer.
Did Viruses have an impact
on the shareware industry?
When consumers realized there were programs written
with the intent to spread and cause damage they
became leary of downloading software because downloads
can contain viruses. The consumers were afraid
of being infected by a virus so, shareware downloads
decreased resulting in a sales decline. As consumers
have become more educated about viruses the impact
of viruses on the shareware industry has lessened.
Hosting.
Web providers provide bandwidth for developer's
websites. Web providing is easier for a developer
because he/she doesn't have to buy a ton of bandwidth,
the developer doesn't have to buy a computer to
host their site, he/she doesn't have to install
and configure a setup to make their bandwidth
secure, and when web providers host, people monitor
the web provided computer 24/7! As you can see
paying a web providing company is way easier and
cheaper. Hosting has helped the shareware industry
a lot because it has made many a developer's site
easier and in many cases faster.
What is software piracy?
There are several kinds of software piracy. One
kind of software piracy is hacking into software
and disabling the copy protection. Software pirates
then distribute or sell the hacked software. The
developer does not receive any money for the software
the hacker distributed. This is an infringement
on the developer's copyright.
Another technique used by hackers
is to illegally obtain a registered copy of software.
Pirates purchase the software once and use it
on multiple computers. Purchasing software with
a stolen credit card is another form of software
piracy. Unfortunately there are many kinds of
software piracy that has slowed the industry's
growth.
The effect of software piracy
on the shareware industry.
In some countries it is not illegal to copy someone
else's work. Nor is it illegal to make several
copies of the same software and then sell them
or give it away. Also in some countries it is
socially acceptable to pirate software. This has
resulted in a struggle for developers. In the
U.S it is illegal to copy someone else's work,
make several copies of the same software or violate
the software licensing agreement. If this is done
by someone in another country the developer cannot
prosecute them.
Registration methods.
Registration methods detail different ways consumers
can purchase software. Early on when shareware
was new, users of software followed the honor
system. If a user liked the application they would
send the author money in the mail.
Nowadays consumers are able to
transfer money online using a credit card or other
electronic payment system. Many software companies
use a registration company to process online orders.
The developer has to pay the registration company
a percentage of the sale. The registration company
provides the developer a secure online ordering
connection and fraud screening.
Software is also purchased using
purchase orders. Once the consumers decide they
like a the software the consumer sends a PO (Purchase
Order,) which is a legally binding contract stating
that they will pay for the software. The developer
will then send the consumer the software, along
with a bill or invoice. The consumer will then
pay the bill.
Another popular registration method
has a buy now button inside the shareware version
of the software. This is probably one of the easiest
registration methods for the customer because
they don't have to call or email the author. If
the user evaluating the software wants to buy
the registered version all they have to do is
click the buy now button. The buy now button will
then bring them to a secure online registration
form that the consumer can fill out.
Registration Incentives.
A registration incentive is something that makes
the person using the shareware version of the
software want to buy. There are a number of incentives
developers use to encourage users to buy. One
popular registration incentive is to limit the
time of the trial version. This is clever because
then the user can't use the shareware version
forever. It encourages them to buy the software
so they can continue to use it when the trial
period is over.
Often shareware versions will have "grayed out"
features on the menu that the consumer can see,
but not use. Typically there is a pop-up windows
in the software encouraging users to register
in order to take advantage of the additional features.
This is a popular registration method because
if the person wants to do more things with the
program, then they are forced to buy the registered
version of the software.
Another registration incentive is water marking.
Often when you print something from the software
it will have a caption that indicates it is an
unregistered version. Only if you buy the registered
version will the watermark not indicate it is
an unregistered version.
Another innovative registration incentive shareware
developers use allows customers to receive discounts
on other software once they have purchased the
registered version.
Developers also provide support incentives. The
shareware version of software will have everything
the registered version has, however, if a person
buys the registered version of the software he/she
will receive tech support, newsletters, and upgrades.
Developers can also limit the number of times
you can use the shareware version of the product.
The trial version may expire after 10 uses meaning
the user has to register if they wish to continue
using the software.
Shareware now and how the term changed.
Though the meaning of the term shareware has not
changed the perception of shareware has evolved
since it began with Jim Button and Andrew Fluegelman.
At first when you had a shareware program there
was a note that asked for a donation. Now you
are required to pay for the registered version
of the shareware program. The shareware industry
has also evolved and grown into a billion dollar
industry.
Why is shareware better than any other
marketing method?
Shareware is a good way to market your software.
It allows consumers to evaluate an application
prior to making a purchase decision. They can
easily determine if it meets their business or
personal needs, which usually results to a satisfied
customer. In addition because shareware companies
are often small they can provide personalized
service that is not found in larger companies.
Shareware also allows for instant gratification,
there is no need to wait for a shipment. Consumers
can download and use the software immediately.
Success Stories.
Success can be measured any number of ways. Many
developers achieve financial success using the
shareware marketing method. Others feel they are
successful because they are able to spend time
with their families and make their own schedules.
Some of the obvious financial shareware success
stories include Winzip, JASC, and Ulead.
Thanks to the following who assisted with
the research:
I would like to thank the following
people who let me interview them:
Sharon Housley active in the shareware
industry. Visit online at http://www.notepage.net
or http://www.softwaremarketingresource.com
Dan Veaner owner of EmmaSoft for 14 years
until it closed in 2003. Visit online at http://www.abdkv.com
Mike Callahan is known for shareware
promotion and is also known as Dr. FileFinder.
Visit him at http://www.drff.com.
Dave Collins is owner
of Shareware Promotions, he is responsible for
promoting shareware applications. Visit online
at http://www.sharewarepromotions.com.
Suda Pethe is owner
of Centered
Systems. He is extremely successful. Visit online
at http://www.centered.com.
Tom Guthery, software developer.
He is the owner of FLIX. Visit online at http://www.flixprod.com.
Tom Simondi is an
industry pioneer and maintains file extension
libraries. Visit online at http://www.cknow.com
Scott Swedorski was the founder
of Tucows. Tucows was thought to be one of the
first 50 commercial sites. Visit online at http://www.promaxum.com.
Steve Lee, is the
owner of SWREG, one of the first secure online
registration services. Visit online at http://www.swreg.com.
Rosemary West, is active on the
ESC board and is partially retired. Visit online
at http://www.rosemarywest.com
Larry McJunkin is involved in WUGNET
and involved with shareware promotion. Visit online
at http://www.wugnet.com.
Paul Mayer is an industry pioneer
and developer of Zpay. Visit him at http://www.zpay.com.
About the Author:
The author is a 10 year old student, Dan Housley.
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