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Comment by indigochill | Hacker News Reader

Free tiers are/should be a marketing tactic that gets people comfortable enough with your product that when it comes time to put money down, they put it on your thing rather than the competitor. It's when free tiers don't have a sufficient draw into a paid tier that you run into problems.

Microsoft figured this out relatively early on during their monopoly lawsuit which they cleverly settled by donating a bunch of Microsoft products to schools so that the next generation of the workforce would grow up on Microsoft products and become commercial Microsoft users in the workforce (and I've seen Apple use this same approach since then). What was ostensibly seen as a punishment by the legal system simply entrenched their position further.

And in gaming, there's an entire industry around "free to play" games that make billions of dollars, although I sincerely hope B2B tech doesn't take marketing inspiration from them.

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Microsoft offers their products to educational institutions for a fraction of the price. You just have to license your staff and get the licenses for your students for "free". And the staff licenses for education cost yearly what businesses pay monthly (MS365 E5 for about $90/year).

In return schools teach their students Microsoft products in school and you can't really beat the pricing. Because running your own infrastructure will be more expensive especially if your school isn't big enough to have it's own IT department. Prices are rising though because you can't license box versions anymore.

So you now have the choice of paying for Teams, SharePoint online and not using them and licensing and running your local file servers, AD etc. or switching more of your infrastructure to the cloud and increasing the lock-in.

This is really worrying to me, but from a cost perspective you can't really justify continue running a lot of infrastructure, especially if your local government doesn't have a lot of funds in the first place. I'd rather spend that money on hardware that the students and teachers can use than pay for servers and licenses.

> ...you can't license box versions anymore.

Of course you can:

https://www.microsoft.com/en-us/microsoft-365/p/office-profe...

https://www.microsoft.com/en-us/microsoft-365/p/office-home-...

Yes I‘m aware boxed versions are still available. But they aren‘t available under the contract the state negotiated with Microsoft. And that’s the terms the schools use to buy licenses if they don’t want to pay a premium.

To change this there would have to be political will to reduce the lock-in and maybe offer a state run cloud service.

There is absolutely educational pricing for boxed Office. It sounds like you might be upset about the choices your State made, and are conflating that with what is possible.

> and I've seen Apple use this same approach since the

Google as well recently - unlimited free G Suite (now Workspace) for schools was a massive draw a few years ago, although they are starting to turn around and monetise now they have a captive audience

Same with gmail. Initially launched with the idea of "Don't throw anything away - you'll never need to delete another message" but now the landing page of gmail talks more about security, productivity and other things since eventually you're gonna have to pay for more storage.

The best use of free tier is to allow engineers at big companies to try things without having to get permission from someone.

There can be a lot of abuse, though.

Precisely. All of /r/homelab on Reddit pretty much centers around enterprise features for free/cheap so they can learn off the job. It's a win for the employer, win for the software manufacturer, and a win for the engineer who is hopefully doing it out of enjoyment rather than pressure.

Pay-to-win web services, right...

I mean, that's basically what freemium is for b2b - want to unlock features that get your job done faster? pay up.

What do you think adwords is?

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