'Free' is the new 'cheap' for software tools

The release of IBM's free DB2 database points to the downward price pressure from open-source programmers' tools.

James Gosling, a vice president and fellow at Sun Microsystems, once quipped that the average software developer spends more on cafe lattes than on tools.

Two years after Gosling deadpanned that one-liner, software developers appear to have even more spare change to feed their caffeine habits.

Free entry-level products are rapidly become de rigueur in many areas of software, notably in programming tools where there are hundreds of thousands of freely available goods.


What's new:
IBM released a free version of its DB2 database on Monday, following similar moves by the other two major corporate database providers, Oracle and Microsoft.

Bottom line:
Viable open-source products are prompting established vendors to introduce free entry-level products, particularly in the field of programming tools.

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On Monday, IBM introduced DB2 Express-C, a free database aimed squarely at software developers. It is a trimmed-down version of its commercial product, and IBM limits its deployment to two-processor servers.

Oracle and Microsoft also recently introduced free versions, joining a number of existing open-source databases, such as MySQL and PostgreSQL, that can be freely downloaded.

The moves by the big three corporate database providers--Oracle, IBM and Microsoft--reflect some of the changing economics of the software business, where freely available open-source products are forcing established vendors to adjust the way they do business, analysts and software industry executives said.

"Commercial vendors competing in areas where there are credible, free open-source alternatives are increasingly being pressured to lower the barriers to entry to their product," said Stephen O'Grady, an analyst at RedMonk.

That's true for many programming-related software applications, including database servers--the underpinning of corporate applications that can fetch high prices, according to analysts and industry executives. But having a free item on a company's product list can makes good business sense, software company executives argue.

By releasing a free version of their database, IBM, Oracle and Microsoft are trying to lure developers away from open-source alternatives and toward their own products, executives said. In addition, these companies can potentially expand their base of customers.

"The open-source and free database-server providers have done the industry a service by demonstrating that there's a broad opportunity out there, among developers and solution providers that hadn't been taking advantage of a database server because of cost," said Bernie Spang, director of data servers at IBM.

Spang said that the free version of DB2 will foster growth of applications built on top of that database. IBM benefits when it sells higher-end versions. Also, a free product can entice third-party software companies or consultants to standardize application development on IBM's entire line of infrastructure software, including the database, application server and other components.

Developer mindshare

Analysts said that it's still unclear whether these free database versions from the three biggest providers will feed the companies' top line.

But IBM, Microsoft and Oracle need to have free offerings purely for defensive reasons, Forrester Research analyst Noel Yuhanna said.

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