I recently purchased a new PC for my personal use. One of the most annoying aspects of getting a new computer is the huge number of "free" applications installed by the manufacturer. Other than a select few such as Acrobat Reader and Skype, most of the free applications–America Online, Napster, QuickBooks Financial Center, Shutterfly, and numerous others–are of dubious value. When I paid my money to the computer store, I was buying the computer's features–3GB SDRAM, 400GB HD, etc., and the free programs had absolutely nothing to do with my purchase. But since they were free, it's hard to complain, other than about the inconvenience of having to remove these useless applications from my new computer.
But offering free products–including free software–is obviously not a viable long-term business strategy. So why do some vendors offer products for free? In some cases the vendor wants to seed the market with free products in the hope of spurring customer demand. Vendors that resort to this strategy usually have a hard time finding customers who are willing to pay money for their products, at least initially. In other cases the vendor hopes to squeeze out competitors and claim market share. Internet Explorer comes to mind in Microsoft's successful campaign to vanquish Netscape with a functionally comparable product. But this strategy is only effective if the free product provides similar capabilities to the targeted competitive product. Since Internet Explorer is included for free in every Windows product, Microsoft can claim significant market share for web browsers.
In the WAN optimization market there are a number of vendors who offer WAN optimization capabilities for "free." Of the larger, more prominent vendors, Cisco is known to bundle WAAS modules into their ISR routers at no additional cost to the customer, particularly for customers who place large orders for those ISR routers. Because the inferior WAAS product is at a competitive disadvantage to the Riverbed Steelhead solution, Cisco has had no choice but to discount it heavily, and at times even offer it for free, in order to entice customers to accept it.
Another vendor that offers WAN optimization for "free" is Blue Coat. The ProxyClient software is distributed at no charge to customers who buy the ProxySG appliance, and the MACH5 WAN optimization features are included at no cost to Blue Coat customers who purchase ProxySG for web security and web filtering.
While offering free products can affect market share statistics, they don't necessarily do anything to improve the viability or value of the free products themselves. Similarly, just because Blue Coat's ProxySG customers get WAN optimization features for free doesn't mean they will necessarily use the ProxySG for WAN optimization. Blue Coat's customer forums (http://forums.bluecoat.com) have plenty of healthy and lively discussion by ProxySG users on its security and web proxy features, but there is almost no discussion at all about the ProxySG's WAN optimization features. It seems that most ProxySG users have found Blue Coat's WAN optimization features to be as useful as the free 90-day subscription to AOL that I got with the purchase of my new computer; in both cases, the "free" features go unused.