Analysis: Free Software Puts Squeeze on Mac E-Mail

IS EUDORA’S AD STRATEGY A LAST-DITCH ATTEMPT TO FIGHT OUTLOOK EXPRESS?

By Jason Snell

When it comes to software, you don’t necessarily get what you pay for.

Qualcomm announced Thursday that it will offer a full version of its Eudora e-mail program for free, continuing a trend that began when Microsoft chose to offer its Internet Explorer Web browser for free. In the short term, Mac users have access to powerful Internet applications they don’t have to pay for. But in the long term, it’s possible that only companies rich or powerful enough to give away their software will be left standing.

Eudora, originally developed at the University of Illinois, has always been available in a free version. Under the license agreement that allowed Qualcomm to develop a commercial version of the program, the company also had to offer a free edition, Eudora Light. Although Qualcomm has added features to Eudora Light over the years, the company has poured most of its development resources into the $50 Eudora Pro.

Now those commercial features–including enhanced filtering, message searching, an in-line spelling checker, the ability to create messages with styled text, support for the IMAP server format, support for multiple e-mail accounts, and more–will be available for free. The catch? The free version will include a small (roughly 150-by-150 pixel) advertising tile that must be in view the entire time you’re using Eudora. (Paying users won’t see the ad tile, and those who don’t want to pay or see the ad can choose a feature-limited mode that’s much like the old Eudora Light. As a result, this new ad-sponsored mode is an addition to the two existing versions of Eudora, not a replacement.)

Why make the change? Qualcomm says the new ad revenue will “use the new business model… [to] drive long-term product development.” Translation: in a world where you can download Microsoft Outlook Express 5.0–a Eudora competitor that offers similar features for free–Qualcomm must sell advertising and give the product away to fund continued software development.

“It’s a bold move, but one Qualcomm really didn’t have a lot of choice in making,” says Adam Engst, publisher of Macintosh newsletter TidBITS and a longtime follower of the Mac e-mail scene. “They were forced into it by the need to actually earn money from their programs. For better or worse, Microsoft and Netscape don’t need to earn money from their client software.”

Feeling the Squeeze

Eudora isn’t the only Mac e-mail program caught in the pinch. Bare Bones Software, maker of the well-respected text editor BBEdit, entered the e-mail market in May 1998 with Mailsmith, a $79 program that offered unprecedented scripting support and flexibility. Though recently updated to version 1.1.5, the program has seen limited acceptance and the company has slowed further development–both of which are probably related.

In a recent poll of TidBITS readers, only 3 percent of respondents said they preferred Mailsmith. While TidBITS’ polls are not scientific, Mailsmith’s showing is still less than you might expect from that publication’s Internet- and Macintosh-savvy readership.

“The current status of Mailsmith is that we’re still shipping it and still supporting both current and new customers,” says Rich Siegel, president of Bare Bones.

But Siegel acknowledges that free software has strained the e-mail market.

“Certainly, the availability of [free] e-mail clients… has distorted the marketplace so that the usual competitive dynamics no longer apply,” he says.

Other commercial e-mail programs, such as CE Software’s QuickMail Pro and CTM Development’s PowerMail, are likely having similar difficulties competing with free products. In addition to Outlook Express, Netscape Communicator includes a free e-mail module.

More To Come

Unfortunately for e-mail developers, the news will likely get worse. Even Microsoft has to be concerned when it considers Apple’s future Mac OS directions. At Apple’s Worldwide Developer Conference last May, iCEO Steve Jobs detailed plans for an Apple-produced e-mail program, MailViewer, to be included in Mac OS X. Though Outlook Express is currently the default Mac e-mail program, MailViewer will undoubtedly usurp that position when Mac OS X is released.

Then there’s the phenomenon of Web sites, such as HotMail and Yahoo, that offer free e-mail services.

All this forces companies such as Qualcomm to give away their software and find other ways to make a profit. And even if they try, some e-mail developers will find that they can’t compete with free products.

“This changes business models in ways software development companies don’t understand,” says Engst. “Selling ads is not easy. It’s really hard work, and very different from anything that any software company… has done.”

In making the move to an ad-driven business model, Qualcomm has a some advantages over other e-mail developers. Although it’s a small player in the software world, it’s a large corporation with clout in the telecommunications industry–and it thus has the resources to set up an ad sales system for Eudora. Qualcomm also benefits from Eudora Light’s large user base, many of whom will no doubt be inclined to switch to the ad-sponsored version.

The Last, Best Hope

On one level, the issue of free software seems like a tempest in a teapot. After all, if programs are free, isn’t that a better deal for consumers? And, yes, anyone can download Outlook Express 5 and use a full-featured, attractive e-mail program for free. But it’s important to remember that price isn’t the only consideration in choosing software.

“It’s tremendously important that other e-mail programs survive,” Engst says. “Much more so than with Web browsers, e-mail is a personal preference kind of thing.”

Choosing which e-mail program to use has much to do with your personal tastes, the volume of e-mail you receive, and how you integrate e-mail into your personal and professional lives. Eudora appeals to a different type of e-mail user than does Outlook Express, and Mailsmith appeals to yet another group.

E-mail developers’ current troubles suggest that personal preference isn’t enough to convince users to spend $50 to $80 for an e-mail program that fits them better. But it’s possible that ad-driven software could tip the scales enough to allow some e-mail competitors, such as Eudora, to survive the free-e-mail onslaught.

Macworld.com editor JASON SNELL has been writing about Internet e-mail since 1993.