The power of FREE – part 2

We looked yesterday at the increasingly number of goods and services that are provided free of charge.  Today we'll look at what that might mean for some participants in the procurement eco-system.

But of course we should say that it isn't exactly impossible to charge, even in the areas where technology has been game-changing. J K Rowling hasn't done too badly, Gartner still do OK, Microsoft haven't exactly gone out of business, and Bruce Springsteen still makes a few dollars.  But the growth of 'free' means that many organisations have had to - or will have to -  fundamentally change their business model.

That is obvious already in areas such as music; my friend's son's band are far more interested in the latest sales figures for their logo'd T-shirts than for their CD*. In other areas, the change may take longer to become apparent.  Will for instance the next generation of CEOs be quite as impressed with consulting firms when they themselves know how much of the IP the consultants are flogging can be accessed in seconds via a quick Google?

In our sphere, a couple of recent posts have touched on this.  Tradeshift with their 'free e-invoicing' product is one.  And I spoke to a very visionary individual after we wrote about Supply Management magazine and CIPS; he felt that maybe CIPS membership might have to be free at some point, because so much of a professional Institute's 'offering' was available free either from the Institute itself (e.g. Supply Management online) or from other sources (e.g. best practice material).

One response to this is to overlay added value that comes with a fee attached - Spotify Premium for instance.  Mozilla and Tradeshift sell additional functionality on top of the free basic product.  Or organisations can look for an alternative source of income that supports the free product.  So Spend Matters gets sponsorship so we can offer 'intellectual capital' and information free to readers.  Springsteen makes gazillions from live performance even if much of his recorded music is in effect given away (or stolen).

For procurement people, it is worth keeping an eye out for what your organisation might be able  to get 'free'.  And for solution providers, will there be more Tradeshift type examples; providers in the sourcing, P2P or other procurement related sectors making a basic offering available free in order to drive different revenue streams and rapidly grow market share? I suspect there might be. And even secure, long-established firms and organisations might find themselves facing new challenges from the power of "FREE"!

* Do listen if you're into metal / math / techno / screamo.  They're brilliant musicians actually.

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