Xojo Ends Freemium Model

This week the Xojo blog announced that they were ending the Freemium model and going to back to the standard 30 day trial period model. As you would expect this has led to an outcry of folks on the forums and there are lots of opinions as to why Xojo is wrong to end the Freemium model. They’re wrong and here’s why.

Xojo said that the Freemium model increased downloads but didn’t change buying habits. The original thinking was that more downloads would get more eyeballs and thus more revenue in the long run. The IDE was free to try and use until you wanted to do a final executable.  It didn’t.  Period.  Their two year experiment with the Freemium model failed.

I don’t mean to belittle the hobbyist developers out there, but there is ample evidence that many of them simply just ran their apps in the IDE rather than compile them as standalone executables, thus not even purchasing an inexpensive desktop license. Obviously this was not the intent of the Freemium model and certainly violates the spirit of the model if not legally as well.

We can argue all day long as to why the freemium model didn’t attract more paying customers. I’m sure there is not just ONE reason but combinations of many smaller issues and here are some wild guesses. Perhaps desktop programming is experiencing a decline and perhaps web apps aren’t growing as much as once thought. Perhaps iOS isn’t an attractive target without Android. Perhaps the lack of business-only features hurts them. Perhaps the IDE design pushes some people away. Heck, I’ve asserted for a long time that the insistence of dumbing down the IDE in favor of newbie programmers is a detriment to the health of the platform. <Insert your favorite theory here>

One argument I might buy is that they didn’t give it a long enough try.  Some times it takes a while for things to take hold.  Add in that two years ago they changed the name of the company/product and lost whatever internet search rankings they may have had and it’s quite possible that it’s only now that people are finding Xojo.  It doesn’t matter now.

Regardless, the bottom line is that the Freemium model didn’t increase revenue for Xojo. At best, it means that revenue stayed the same and, at worst, they lost revenue. No company can stay in business by having static or negative revenue.  Expenses only go down through layoffs and no one wants that.  It’s the right business decision or otherwise we might not have our favorite development tool around in another year or two.

So while it’s sad it didn’t help them I can’t complain. They know the financial numbers better than we ever will. They told us the reasons so it’s time to move on.

What do you think?

24 thoughts on “Xojo Ends Freemium Model

  1. “I don’t mean to belittle the hobbyist developers out there, but there is ample evidence that many of them simply just ran their apps in the IDE rather than compile them as standalone executables, thus not even purchasing an inexpensive desktop license.”

    I don’t understand that… I would never be satisfied without being able to compile and I would not want to do anything significant without a build license.

    That said, although I think I do fall into the “hobbyist” category, most of my non trivial apps have been used by others at work, and have been for the last 14 years.

    • Personally I would call you part of the pro crowd even if you don’t consider yourself a pro. 14 years is about as long as I’ve been using the product and the only different between us is that I sell my services.

  2. The IDE was never dumbed down – it is more convoluted and requires more clicks to do things than before, ergo it is more complicated. See https://forum.xojo.com/22617-trying-to-understand-xojo/0#p188546

    I strongly disagree with your assertion that hobbyist programmers violate the spirit of the user agreement. For one thing they have been explicitly told that they can use it that way. Secondly it is not uncommon for hobby apps to take years before they reach the point of requiring compilation (for example to put them out as freeware or shareware). And two years is simply not enough time for most users to reach that level (I think you have a case of professional blinders there).

    The timing of the change is clever as the next version will be 64 bit, something which quickly becomes a must. So that might get a few of the hobbyists to buy a license even if they normally wouldn’t yet.

    • Well, I agree that the IDE is convoluted. I believe that part of that is the misguided belief that we need our hands held. In the effort to make it ‘safer’ for us all they did was make it ‘harder’. And I would argue we’re no safer than any other development tool.

  3. What I find a bit more concerting is that I encountered several times Xojo being described as an Abo model. Not sure if that is deliberate FUD or simple ignorance.

    • It’s obvious that while the freemium model generated a lot of new users and downloads it didn’t generate new revenue.

  4. Xojo got a lot of freemium new users (see GP’s oh-so-carefully worded blog post, last December) but those cheeky devils didn’t do what they were supposed to, buy a licence to compile, and give money to xojo.
    If you believe xojo the freemium licence had no effect one way or the other on sales.
    So what’s the problem then?
    The freemium users cost xojo nothing, they are people who would never have bought xojo in the first place. Some of them, kids, might have eventually.
    It surely also had the effect of raising xojo’s profile.
    Xojo don’t seem to understand that and this, to me, is a cynical and penny pinching move to extract a few paid for licences from this cohort and the rest of those pesky freeloaders can go to hell.
    Xojo will pay a price for this in terms of reputation.
    At a time when even microsoft is coseying up to the open source community xojo looks more and more anachronistic. They’re like the North Korea of developer tools, closed source, tightly controlled forum, no-warning policy changes, taking repeated punts on hitting the bigtime while squeezing their existing user population for every last dollar.

    • Freemium certainly does cost quite a bit. Aside from bandwidth of non-revenue generating downloads, there are support requests. A freemium is more likely to be a new user and new users require more support. So you have a non-revenue generating source of support expense.

      The other kind of freemium I don’t really consider a freemium. That is the shops who have one builder and a bunch of people using the free IDE to get out of paying. I call those people leaches.

  5. “The freemium users cost xojo nothing”

    Not true… If you read between some of the lines of posts by Xojo on the forum (and had seen some posts now deleted) while the number of downloads did not increase significantly, the total number of purchases of those who downloaded decreased.

    Obviously they can’t live with that. Now one could argue that other factors besides free use of the IDE were involved (and I do think the IDE was factor along with other things), but they could not take that chance.

    Now with no Freemium, I do think full price renewals are gong to be another issue.

    In any case I think they tried too many changes at the same time and I hope they have not been hurt too badly,

    • I removed my comments as they would have served no purpose other than extending an already long & arduous thread.
      Nothing nefarious.
      No hidden meaning other than “Norm decided not to post additional comments and extend a long thread”

  6. ” If you read between some of the lines of posts by Xojo on the forum (and had seen some posts now deleted) ”

    OK my mistake. That blog post by Geoff does require reading between the lines though. Two pie charts of equal size, divided on the basis of percentages are presented, thereby removing any possibility of comparing the relative scale of downloads before and since Freemium.
    The GP discusses ‘numbers’ as though the charts had provided illumination on those.
    It’s the usual deliberately vague stuff.
    The appearance of openness without the substance.
    The deleted posts by Norman that were presumably off-message by revealing too much.

    • Of course it’s vague. The fact that Xojo shared *anything* with us is good. As a privately held company they have no obligation to share numbers with anyone. Fact is, Xojo could have simply changed the policy without telling us anything. It may have been better not to but that’s beside the point now.

  7. I had dinner with a former Xojo engineer last week. I thought one of his comments was insightful. He asked how many companies of Xojo’s size are still around 15 years later? The answer is not many.

    How many companies do what Xojo does? Again the answer is not many. Their direct competitors? LiveCode: not as complete (IMO) and a language that turns many off. FileMaker: not really a competitor. 4D: not really a competitor. Xamarin? It has a lot of marketing might behind it and is HUGE in mobile and desktop is kind of an afterthought. Also considerably larger and has connections with Microsoft. Java: I’m not sure that it’s a desktop app competitor and the runtime requirements kind of stink. Qt: Definitely not a RAD environment.

    I’m sure there are others but my point is that Xojo really is a good long-term platform. It’s adapted to the changing winds (perhaps not quickly) and managed to stay in business. Considering that most businesses fail that’s an accomplishment that should be applauded.

    • I disagree about Qt not being RAD. Qt Creator is an awesome IDE and I’ve developed a few pretty impressive apps with QML & Qt Quick which would have taken me much longer to do with Xojo (in one case it would have probably taken years to do with Xojo because it would have required extensive custom development to create some Qt features that Xojo doesn’t have — the Qt framework is much deeper and broader than Xojo in nearly every respect).

  8. “I had dinner with a former Xojo engineer last week. I thought one of his comments was insightful. He asked how many companies of Xojo’s size are still around 15 years later? The answer is not many.”

    Fair enough, but part of the problem xojo has is looking like it shouldn’t be around.

    I don’t know a whole lot about the Qt company, for example, other than that it’s a subsidiary of digia a company with 1000 employees.
    I also know that even if digia go bust tomorrow that Qt will survive because it’s open source and has a huge developer community.

  9. Freemium is back again
    https://forum.xojo.com/22703-freemium-will-continue

    Blog post announcing the end of Freemium has disappeared as, it seems, has the long thread on the forum discussing th ending of Freemium.
    That last part really sucks in my view and is exactly the reason why xojo should not have control over the only forum disussing xojo.
    Really looks like xojo don’t know what they’re doing

  10. The original blog post is still in the google cache, I don’t know how long they keep it for.
    http://webcache.googleusercontent.com/search?q=cache:w-dQ25mdMv4J:www.xojo.com/blog/en/2015/05/freemium-or-30-day-trial.php+&cd=1&hl=en&ct=clnk&gl=uk

    Xojo got rid of the mailing lists and instituted tighter control over posts in the forum getting everyone posting under their real name and headshot.
    Now this silliness of deleting a whole thread about their decision and deleting a blog post.
    They want a positive image of xojo but they are going about it in a totalitarian regime method.
    Unpleasant news never happened just like in pravda

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