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Free software: How it drives AVG's business

AVG's CEO, JR Smith, openly admitted in an interview with CNET UK that "Free is what drives our business. Without it, we'd be nowhere today"

Chris Anderson's new book, Free, explores the direction part of our economy is taking -- a direction in which the infinitely copyable, ie digital content, gravitates towards costing nothing, with revenue generated via other means. To Anderson, "$0.00 is the future of business."

And, it transpires, he is by no means alone. AVG's CEO, JR Smith, openly admitted in a recent interview with CNET UK that, "Free is what drives our business. Without it, we'd be nowhere today."

AVG offers three main anti-virus and anti-malware products. Two will cost you a few tenners each year, but the other offers to protect your computer from viruses and infections, in real-time, and AVG just gives it away to tens of millions of people worldwide.

"It's probably the single biggest driving factor," Smith explained. "And in Europe, [free] is highly disruptive to the big guys. They definitely don't like the fact that we're out there giving a product away for free."

It's not a new concept, of course. Companies have always given away trial versions of software, hoping to tempt users into paying to keep using it. But what AVG does is give the entire product away for free, forever, in the hope that eventually users will want a more fully featured package.

"Basically, antivirus is highly commoditised, and that's why Microsoft is coming out with a free version. We've been doing that for about nine years. We can say, 'Hey guys, basic AV is good, but at some point if you're a serious user you're going to need to upgrade,' and that seems to work for us."

Apparently it has, too. AVG claims to have 80 million users worldwide, and Smith says the company is growing fast. "We like the fact that we're an underdog, that we're growing 80 to 85 per cent a year."

In fact, next year the company hopes to bring out antimalware products for Apple's iPhone and a full desktop suite for Mac OS X.

So AVG's business model seems to gel with the opinions of Chris Anderson, in that the future of business lies in free products being effectively subsidised by other parts of the business, in an effort to get the customer in the first place.

"Free is what drives our business. Without it, we'd be nowhere today."