How free is free ?

From free emails (Gmail) to free classifieds (Google Base) to free web analytics (Google Analytics) you might think you’ve seen “free anything” on the web … hum … had you ever thought of a free ATS?

In case you’re beginning to think Google decided to ruin the ATS’ business, you’re wrong. I’m not talking G-ATS (in case this ever happens to exist, remember I did coin the term). No, the one company venturing into the free ATS space this week is among the ones you would least expect the move to come from : Mr Ted, a french/english entreprise level ATS provider. Their product, SmartRecruiters, fits in a category they describe as “Open Saas” (a mashup term of Open Source and Software as a service).

Ok, I think I know what you’re thinking right now : “how dumb must those guys be to decide to shoot themselves in the foot and still look happy about it?”. Funny, the first time Jérôme Ternynck (Mr Ted’s founder and CEO) introduced me the idea of a free ATS in march, he said exactly the same “Maybe Mr Ted commits suicide … or maybe not :)”.

Think of it twice, it is reasonable to think that at some point, every medium sized company will need/get an ATS of some form, of course some companies require a level of setup, training, support and customization that will probably keep them out of the “free zone” but what percentage is that? Probably a small one … let’s say 5% for argument’s sake.

Now think again, does that make any sense, as a software company, to wave your potential license fees to basically own a huge chunk of the remaining (95% or so) recruiter’s desktop?
I personally think it does … very much …

Why? Because if the recruiters use your recruiting software, companies that would like to offer their services to those recruiters will have to talk to you! Moreover, recruiters that want to use those value added service you end up offering through third party vendors can purchase it … through you …

Still having a hard time figuring this out? That’s fine, give me 5 minutes of your time will you?

Go to vistaprint.com. Pretend you want to order those “free business cards” and go all the way through the request. See the upselling opportunities? See the offers from their partners? See they want to collect your email to notify you of stuffs you probably don’t want to buy? Finally, see their different shipping options?

Do they get a percentage of “whatever you’ll buy from their partners”, yes.
Do they hope that at some point you’ll want to go “premium” to remove the ads at the back of the cards or choose a thicker paper, yes.
Do they get a commission from the shipping company, probably …
Do they make profit out of “free”, yes.

Does that make you want to pay for the exact same service, no way!

Are these guys smart, I definitely think so.

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Thomas Delorme
Written by Thomas Delorme

VP, Digital Products & Strategy

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