Monday, March 17, 2014

No Such Thing as a Free Lunch?


At least that is what my grandmother always told me...I think I heard a collective gasp around the IT Service Management industry when ManageEngine announced earlier this month that the basic version of their ITSM solution - ServiceDesk Plus - would now be offered free, with no licensing restrictions to current and future customers...so is this the ITSM version of a free lunch, or just a clever marketing strategy?

My first thought was "OK, what's the catch?" ManageEngine is in the ITSM game for profit, not philanthropy, so obviously they are viewing this as a way to increase their market share and upsell this offering to higher value products, we have to assume that they are not doing this out of the goodness of their hearts!


How free is 'free'?

So does this really mean that organisations that may be in the market for an ITSM solution can grab this with no costs? Well...yes and no...anyone who has taken on the unenviable task of selecting, configuring and launching a new service desk product can tell you that the software cost is just one of the components of the project and, in every case that I have been involved in, not the largest cost. So 'yes', the software is free, but 'no', this by no means that you will get away without cost. It will remove one line item from the project and reduce your capital costs, but the project will still need a substantial budget.

ServiceDesk Plus is not a lightweight freeware help desk application. It is well regarded ITIL-based service desk offering and is currently installed in over 60.000 locations worldwide. In a very crowded and competitive market, this is a pretty gutsy move and I imagine one that will instantly put the solution on the short list for many service desk initiatives globally. So, apart from service contracts and some configuration and installation charges for ManageEngine partners, how does this move make sense?

Getting hooked...

Freemium software is nothing new, and a legitimate way of turning a profit. I am a bit of a puzzle fan and have installed a few 'free' apps on my phone...you know the ones, you get hooked in the first few levels which are pretty easy to crack, the next few offer a bit more of a challenge and then they start to get more and more difficult to solve...then you get that little message on the screen -'you seem to be having some trouble with this level, would you like to buy a booster?' You resist for as long as possible, but then the frustration grows and you spend just a couple of dollars on a few boosters or hints to get you through to the next stage. When you have hundreds of thousands of people playing the game, it doesn't take a rocket scientist to realise that there is a lot of money coming in from these tiny 'in-game' purchases.

While ManageEngine is not going to plague you with messages - 'you seem to be having problems closing this incident, do you want to purchase a knowledge base?' - or at least I hope they are not, I am sure that they will be wanting to up-sell you on to some of the other 30 odd products in their software stable. The free installation of ServiceDesk Plus will simply become one of their 'costs of sales', just as the basic game app you have on your phone is a cost of sale for the booster packs you are expected to purchase as you get familiar with the game.

Free or not, it has to be good

I really don't see anything wrong with this business model and it should be a win-win for everyone concerned. If you really only want or need a service desk solution, don't need monitoring or any of the other solutions on offer from ManageEngine then, fantastic, you have just saved the costs of your software. If you do want to expand the organisational value of your ITSM solution to include other modules, then there is a good range of options to choose from and you have still saved yourself the initial software outlay. I will certainly recommend putting ServiceDesk Plus on the short list for any of my own customers who are in the market for a service desk solution.

ManageEngine still has to prove that their software is worthy, if a service desk system is rubbish, then the cost, no matter how cheap - or free - is not worth it and you will certainly not be in the market for more paid products from the same vendor. This move has to show that the company has a lot of faith in the quality of its products. Being free does not make the product a 'shoe-in' by any stretch of the imagination.

I really hope this works, if nothing else it is a very disruptive move and one that I am sure other vendors will be watching with interest and probably some trepidation and it may well be a game changer for the SMB sector of the market that ManageEngine inhabits.



1 comment:

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