Are free Apps going extinct?

[#1]

Hello Jira Guys and Gals! Well, it's Wednesday. I hope you're having a great week so far. So, what are we talking about today?

 Before we start, I plan to talk about the layoffs at Atlassian this week eventually. However, I first want to collect my thoughts. I've seen others in the Atlassian space rush to get something out and give rather bad takes. I have my history with layoffs (I would not be writing this now if not for one!), so I think it's essential to take my time, let my own emotions settle, and give you as clear a picture as I'm able to portray given a) I don't work for Atlassian, and b) I don't have all the details. 

 Instead, this week's article is inspired by a long-time blog reader. They had a few free Apps on the Atlassian Marketplace that they've recently had to drop support for. The reason they gave was multi-factored, but it included the loss of a developer, the Server products being sunset, and an annual review required for all Data Center Apps. Simply put, with all the work required, It didn't make sense for him to support Data Center Apps, and soon supporting Server Apps would also not make sense.

 So, his question to me was this: Will free Apps survive?

Before I start, I want to thank Joseph Law with Blended Perspectives (now part of Contegix). If you don't know, Blended Perspectives has MARS, the most comprehensive database with statistics from the Atlassian Marketplace. If you have any questions about how the Atlassian Marketplace has changed over the years, they are the people to go to, and this article would not have even remotely been possible without their help. Thank you!

The Hypothesis

So, the reader's position is that they feel Free Apps in the Marketplace will eventually become a thing of the past. This situation would be easy to imagine, as these Free Apps have always been a rarity within the Atlassian Marketplace. And, to be frank, most of them are for Atlassian's Server products, which as of this writing, only have about 11 months of life left.  

 What would this look like in practical terms? If the changes in the Atlassian Ecosystem were truly driving free Apps out, we'd be seeing more Apps go from Free to paid over time. So let's go with that as a hypothesis and test.  

Hypothesis: More Free Apps are going paid in the Atlassian Marketplace over time. 

Test: Plot how many Apps have gone from free to paid over time. If the hypothesis is true, we should see an upward trend.

So, What does the data Say?

I'll include the spreadsheet I analyzed at the end of the article for you to review. This data is a snapshot of things that existed in March of 2023. That being said, the data MARS provided was the Apps that have gone paid, their vendor, how many Instances they are installed on, the Platforms they support, and the last month they were Free. I've then extrapolated the Quarter they went Paid (roughly) and added a Field for each Platform that could be supported.

 So, what does the Data Say? Let's break it down one Platform at a time.

Cloud Apps

So, for Cloud Apps, things are trending up. My first hunch would be to say that this does confirm our hypothesis until I remember that the entire category is growing in the Marketplace. Every month, more and more vendors are figuring out how to make their classic Data Center and Server Apps available on Cloud. Some of these may debut as free while tested, then move to free once confirmed functional. Honestly, we don't have enough data to say conclusively. However, if you look at the Polynomial trend line, it's starting to curve downwards, meaning while it may have been rising during the overall period, it might be trending downwards now. 

Data Center Apps

This one is clear-cut. Under the polynomial Analysis, the trend started positive but has sloped downwards since. Even the linear Analysis shows a negative trend overall. Now, there was elevated activity here immediately after the Server announcement and lasting through 2021Q2. But now, companies are betting that Data Center will be here to stay for the foreseeable future and are willing to do business in that space.  

Server Apps

I'm not going to lie; this one surprised me the most. With Server coming to its end of life, I would think more companies would get their money while they can. But, instead, it appears that companies have decided that the PR hit of charging for a previously free product. But, of course, this is a moot point with the end of new Server App license sales last month.

That being said, the spike corresponding to 2021Q2 is indeed interesting. This corresponds with the end of sales on new Atlassian application licenses in February 2021. This spike might also explain why the overall pace of conversions is slower after it. Everyone who would have converted to paid did so in 2021Q2, leaving only a handful left to convert afterward. 

App Install Base

This graph is another analysis that surprised me, though it shouldn't have. Apps with smaller install bases are far more likely to start free and convert to paid than larger apps. Looking objectively, though, it makes sense. Larger Apps are more likely to have either start out paid or converted to paid before the data starts. That leaves a relatively smaller pool that can convert to free.

Likewise, Smaller Apps are more likely to be free while they get started, meaning there's more opportunity for one of them to convert to paid.  

Other Analysis I would have liked to do.

I also organized the Data by Vendor to see if there was some trend there, but unfortunately, I didn't have enough data to form a definitive conclusion. For example, was the App acquired before or after the conversion to paid? What total of the vendor's apps were converted from free to paid? All these are good questions that I couldn't derive from the data I had.

Another analysis I would have liked to do is to figure out how many of these conversions happened simultaneously with the release of either the Cloud or Data Center version of the App. Colloquially, I looked up around 50 of these Apps and looked through the history, and a fair number did coincide with their Data Center release. That would have also told an interesting story, but it's not one I can tell from this data set.  

And lastly, how many Apps have just gone to an unsupported model since the announcement of Server's end of life? That, honestly, would be interesting and might make a great future article.

So, Are free apps going extinct?

No. Until next time, I'm the...

Seriously though, the data doesn't bear out that conclusion. Don't get me wrong, Server Apps won't be in a healthy state over the next year, but that's to be expected. But putting your App out for free is a great way to get your name and product out into the Marketplace and build a reputation. And once you have customers hooked, well, that's when you reel them in by converting your App. So as long as there are things Jira can't do natively, there will be free apps.

 

Even the Marketplace itself bears this out. When I started as a Jira Admin, I took one afternoon and reviewed all the free apps available for Jira in the Marketplace. I don't remember the exact number available, but it was in the lower double digits. I remember this because it left an impression on me. Fast forward to today, and yeah - definitely a different story. I don't have an exact number, but it's "Over 1000!" More than I can look at in an afternoon, that's for sure.  

Your thoughts?

So, what do you think? Are we seeing the end of Free Apps or just the start of the next phase of the Atlassian Ecosystem? I think there are even more questions to be answered here, like "What is up with all the acquisitions in the Atlassian Marketplace?" (Looking at you two, Atlassian and Appfire!)  

But I'd love to hear your thoughts! Be sure to comment here or on social media. You can find my links on Linktree. Be sure to like and share the story to help more people discover this!

But until next time, my name is Rodney, asking, "Have you updated your Jira issues today?"

[Nic Brough -Adaptavist-]

So, I'm quite "long in the tooth" like you are - I've been in the ecosystem since Jira 2 was released.

And to do the disclaimer thing (I don't like calling it a "disclaimer", but I do like being open about it), I have worked for Adaptavist, an Atlassian partner, for the last 9 years.  I still try to think and write as an end-user rather than a partner when discussing things on = Community, but I will take no offence if anyone points out that I may have slipped into marketing Adaptavist and tells me to shut up about it!

In the beginning, there were a lot of vendors giving out free apps, mostly small ones that solved small problems.  I remember apps that provided a couple of post-functions, or three Confluence macros. The authors did not try to monetise them, they were simply too small to be worth it.

As Atlassian evolved, many of these apps grew to cover more problems or cleverness. Eventually, the authors realised they could monetise them, even when it was only a few dollars per thousand people.  

So I think most apps went to paid versions simply because they could. 

There are some variants - there are some apps that are still free, or horrendously cheap, but I think they have moved into "loss leader" territory.  "If we give you this cheap or free, you're very likely to take up the paid version / another of our products / one of our services"

So yes, @Rodney Nissen - ReleaseTEAM TLDR, free apps are going to go extinct. There is no reason to write them any more.  Even before going over to the orange side, I'd stopped writing (none of my old apps can be found on marketplace any more)

[Rodney Nissen - ReleaseTEAM]

Maybe eventually,@Nic Brough -Adaptavist- , but the data I have doesn't seem to imply that is currently happening.  I don't think the financial incentive is there for apps to stay free permanently, but there is still plenty of reason for small apps to be free to at their inception.  After all, for every Appfire or Adaptavist, there is a dozen other smaller companies, and Clouds architecture is different enough for them to have a chance to get a fresh start.

[Nic Brough -Adaptavist-]

Oh I agree with that - I don't think "free because it's new and we're going to monetise when we've built it up based on feedback" apps are going to stop happening, and there's always going to be a small number of apps available simply because the authors are fans and want to give something back.  And, of course, the "loss leaders" I mentioned.  

[Nikki Zavadska _Appfire_]

I always like to think that there is no such thing as a free app..

Looking at the Marketplace in the past years I saw many apps being launched as free and then when they reach enough installs turning payed. Easiest but not the nicest way to get traction 🙈

Given there is so much demand on security and development on vendors having only free apps is way too much effort. The only way they could survive is by being maintained by partners who also have other larger payed apps that can support the development.

On the other note the free tier for Cloud apps for up to 10 users is a great alternative that many started getting on board with 🫶

[Ulrich Kuhnhardt _IzymesCo_]

Agree with Nikki, many fantastic free apps have disappeared because of the the compliance, security and dc approval overhead that is simply too much for enthusiasts that are not keen on what they consider soul-destroying enterprise level red tape 🙈