Freeware vs. Shareware vs. Open Source – What is Each and How to Use Them Safely

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What type of software should your company use?

During the last decade or so, software deployment for both SMBs and enterprise has become rather problematic – not so much on the upscaling part, but rather on the number of licenses an institution has to purchase and renew. The costs can be ginormous, which is the very reason why the company owner resorts to cost-effective alternatives such as freeware, shareware, and open-source. In this article, I’m going to run you through each category. After that, you can decide which is better for your business. Let’s get to it – freeware vs. shareware vs. open source. Who will win the race?

What is Freeware?

Loosely defined as a type of proprietary software, that it’s being distributed at no cost whatsoever for the user, freeware is the answer to accomplishing very simple tasks without the need of investing in expensive, license-based software. Freeware software has no EULA, license, or rights of any kind, which means that it can be deployed on both home and enterprise machines.

Freeware is not a modern concoction. In fact, the term itself was coined in the golden 80s by Andrew Fluegelman, who sough of means of making PC-Talk (Skype’s long-forgotten ancestors) available outside regular distribution channels. The key differentiator between freeware, shareware, and open-source is that freeware does not make its source code available, despite being free of charge.

A couple of freeware examples: Discord (IM used by the gaming community), Yahoo Messenger (rest in peace, my friend), µTorrent, IrfanView, Groove Music, Winamp, DVD Shrink, CCleaner, and others.

Freeware pros:

* Easy to use and deploy (for home users and enterprises\SMBs).
* A great way to incentivize your potential customers (for soft makers and marketeers gunning for paid licenses).
* Solve daily tasks without having to invest in expensive software.
* Quickly grow your user base.

Freeware cons:

* Limited functionality.
* No way of reverse-engineering it since the source code is not made available.
* Customers may sometimes perceive the product as inferior.

What is Shareware?

Probably most of the apps found online and offline fall under this category. Shareware is so widespread that it ‘felt’ the need to have its own consortium. Called the Association of Shareware Professional or ASP, for short, this international trading and trade organization comprises over 1,500 vendors, authors, and online retailers. The term was coined around the same time as freeware.

While Fluegelman was pushing his PC-Talk comm app. Jim “Button” Knopf, an IBM employee at that time, was releasing a database program called PC-File. In legal terms, the main difference between Knopf’s apps and Fluegelman’s freebie is that the database program was never meant to be offered free of charge.

Knopf himself called his creation “user-supported software” meaning that users would need to cover some of the fees associated with the continual development of the product. No doubt, an interesting marketing praxis, but a lucrative one, given shareware’s popularity and availability.

Shareware is an umbrella term, encompassing various types of apps, each following a unique business model.
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