Software Wants To Be Free, And Apple Is Getting With The Program

What should software cost?

In the age of Google Apps, when Microsoft bundles Office with its Surface tablets, the right price seems to be zero.

Hence Apple's announcement that it will now give away its desktop operating system, Mac OS X Mavericks, as well as its iLife and iWork application suites for the Mac, iPhone and iPad.

Strictly speaking, Apple has never sold its Mac operating system as a standalone product; it came bundled with Macs, and Apple only sold upgrades to the latest version. Those upgrades have been coming down in price; in recent years, the price has fallen from $99.99 to $29.99 to $19.99 for Mountain Lion, the version before Mavericks.

Since becoming Apple's CEO, Tim Cook has stressed the company's combination of hardware, software and services. As such, it hardly makes sense to break out the cost: It's all part of the package for the consumer.

A Software Dream Deferred

Indeed, one of the things that may have been holding Apple back from making this move earlier are the abstruse accounting rules around selling software. When Apple sells an iPhone or a Mac, it must technically hold back, or defer, some of the revenue it receives, recognizing that some of the value it gives the buyer will come from software upgrades and associated services it has not yet delivered.

But that software and those services come over the airwaves now, not in a packaged box. Apple Stores once had shelf after shelf of shrink-wrapped software boxes; they are making way for cases and other accessories, as the Mac and iOS App Stores take over their software-sales function.

The green-eyeshade brigade may need some time to figure out how to put a value on Apple's free software. But consumers have already voted: They expect their connected devices to work out of the box, and they don't put fine distinctions on what's an app and what's part of the operating system.

Is voice calling or text messaging an app? Technically, yes, yet no one would buy a phone without these functions. Maps used to be something we thought of as an app, but it's increasingly becoming subsumed into systems. Likewise, the tools we use to manage and manipulate photos, videos, and documents.

It all should just work—and it should be free with purchase.