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Russian shareware vendors face tough conditions

July 31, 1998
Web posted at: 9:05 AM EDT

by Patrick Thibodeau

(IDG) -- The shareware business model has caught the interest of Russian software developers, who were at the Eighth Annual Shareware Industry Conference for the first time, organizers said. The show is being held here this week.

Selling shareware in Russia is difficult, said Pavel Zhelty, president of PY Software, Inc. in Moscow, which makes software ranging from Internet utilities to screen savers.

Few people in Russia own PCs, and shareware offerings compete against bootleg versions of well-known software from large companies. Versions of Microsoft Corp.'s Windows 98, for instance, can be had for $4 to $5 on the Russian black market, Zhelty said.

"It's almost impossible to sell shareware programs in Russia," agreed Vladimir Katalov, who runs Elcom, which sells its disk management software mainly to U.S. and European customers.

Many Russian-designed shareware offerings - most with English language interfaces - can be found at a Russian-based shareware site, run by Alexander Katalov of Moscow.

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Shareware: A burgeoning business

Ask Thomas Warfield whether his shareware can be found on corporate PCs, and he flashes a mischievous grin. He knows his software is installed on many corporate users' desktops - even if the businesses themselves don't.

Warfield makes Pretty Good Solitaire, a collection of 200 card games. He has adapted his software to the workplace by creating a tiny icon that makes the game almost invisible when minimized. He said he's now considering suggestions from users who worry about bosses snooping over their shoulders.

One suggestion he's received would be to remove the date and time records of games played. "I think that's going to be an option in the next version," Warfield said.

Obviously, Warfield doesn't market his game software directly to businesses. But most shareware entrepreneurs couldn't do that in any case - they lack the staff, resources and the well-known brand names that can open corporate doors. If shareware does by chance turn up on a corporate purchase order, said many developers at the 8th Annual Shareware Industry Conference held here last week, it's because someone test-drove an application and found it useful.

However, selling their wares to corporate users isn't shareware developers' No. 1 concern. Staying alive is.

For instance, Dan Baker and several other former WordPerfect employees developed a Windows word processing program, Yeah Write. They initially gave the application away as freeware to build demand, a common strategy for shareware developers. Later, they released shareware versions that sell for about $20 each.

"I think we had pretty low expectations, but what we got was lower than our expectations," said Baker, who is vice president at Word Place, Inc. in Orem, Utah. Word Place sells about four to six copies of Yeah Write per day. But that isn't quite enough for Baker, his three software developers and a corporate president to live on.

Baker said they believed their software, which includes templates that make it easy to write business letters and memos, would appeal to the small mom-and-pop business market. But Word Place finds itself competing with the Microsoft Corp. word processors that come bundled with most PCs.

"One of the problems is we're a Windows word processor, which is almost insane," Baker admitted.

Nonetheless, the software, which was a contender for a major award at the conference, did attract interest from a retail distributor. So Word Place created a box, a manual and shrink-wrapped the package so it could be sold off retailers' shelves.

But then the shareware entrepreneurs hit another roadblock - attitude. Once the distributor read what the company had written about the word processor on its box, it balked. Baker said a paragraph described the software's limitations.

The distributor wanted it to say "everybody, this is for you," according to Baker.

There's no doubt that developers at this show could easily get jobs working at major software firms. But shareware's appeal includes the freedom to work for yourself, many said.

Warfield, for instance, previously worked at an accounting software vendor. He quit to form a one-person operation, Goodsol Development in Springfield, Ill., when sales of Pretty Good Solitaire took off.

"It just got so successful that income from it was enough," he said.

He estimates that he has more than 500,000 downloads, with anywhere from 1% to 2% of those downloading the software buying it at $24 a copy.

At one time, shareware was largely distributed via mail order. But the Internet has changed that. It also may be encouraging more people to enter the shareware game. It was difficult for anyone at this conference to provide anything more than a guess about the total number of shareware developers.

But many said the ease in distributing shareware via Web downloading is helping to increase the competition.

"There's a glut of shareware out there," said Ray Kaliss, a Meriden, Conn.-based distributor.

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