The Hidden Costs of Free Software

The Hidden Costs of Free Software

Free software, or freeware, is ideal for many employees. It’s free, very suitable for specific applications, and often easy to install. The downside is that freeware is paid for with data that is fed back to the provider. Freeware capitalizes on the happy feeling people get when something is free, but much freeware is only “”free”” for home or school use, not for business use. Moreover, it can happen that just as employees get used to the convenient features the solution offers, the free software is required to be converted to a paid subscription. And that can have serious consequences for the IT budget.

Consider Java—not an employee tool, but previously free and popular because the development platform was stable and innovative. Many organizations used this platform, and then Oracle acquired Java and made paid subscriptions for Java Standard Edition (SE) updates mandatory in 2019. In 2023, the company-wide metric model was introduced, giving all employees a license, even if only one person uses Java. For many organizations, this change led to unforeseen costs of millions of dollars, forcing them to reassess their Java usage and seek alternatives, with all the disruptions that entails.

The many Risks of Freeware

In addition to financial dangers, freeware poses several other significant risks:

  • Vendor dependency: As reliance on specific tools grows, it becomes increasingly expensive and difficult to switch vendors.
  • Hidden data collection: Usage patterns and sensitive information can be collected and sold to third parties.
  • Limited control over features: Teams often work with limited functionality, leading to productivity loss and unexpected upgrade demands.
  • Security risks: Due to inconsistent patches and limited testing, you are at greater risk of cyber threats, which can compromise security.

There are also freeware challenges that have nothing to do with budgets or a change in licensing terms. Take WinRAR, for example, a tool that allows you to pack or compress files. This solution is often distributed via individual downloads. When IT departments need to remove the software (for example, due to security reasons or compliance requirements), they face a thorough search through their networks. Trying to find and remove thousands of pieces of software in a corporate network takes a lot of time.

How to Mitigate the Risks of Freeware

How do you keep your network clean and ensure that the dangers of freeware are minimized? One solution is obvious (although practice shows that it doesn’t happen often): start with good controls, for example, on what employees download. This proactive action is easier than dealing with unexpected licensing costs, security breaches, or the tedious task of removing deeply embedded freeware afterward.

Here are three practical ways to keep a good eye on what is happening on the network:

1. Know What is Installed

The first step is to gain full insight into the software used within the organization. In practice, it often turns out that there is a lot of freeware or unauthorized applications running that the IT department is unaware of. Without this knowledge, it is impossible to perform effective management or risk assessment.

2. Build Strategic Control from the Start

A solid IT Asset Management (ITAM) program lays the foundation for structural control. By properly aligning processes, technology, and involved employees, sustainable management of software and licenses is created. Elements that are important here include:

  • Automated detection of all applications, including freeware
  • Accurate measurement of software usage and compliance
  • Integration with procurement and security workflows
  • Regular assessments of portfolio optimization
  • Proactive management of license changes

The success of an ITAM approach depends on more than just tools. The involvement of departments and clear process agreements also play a key role.

3. Combine Tools, Processes, and Collaboration

Technology alone does not provide a complete answer to the challenges of software management. Modern ITAM tools can map out licensing requirements well, but effective control only arises in combination with clear policies, consistent monitoring, and collaboration between IT, procurement, and security. This integrated approach ensures that the entire software environment is quickly and reliably mapped.

Keep Freeware in Check

The appeal of freeware is clear: free is always nice. But as mentioned, this often brings significant hidden costs. Think of covert data collection, security risks, operational disruptions, and unexpected license changes.

The good news? These risks are entirely manageable with the right approach. By implementing accurate controls early, maintaining clear insight into the IT environment, and collaborating with an experienced partner, organizations can prevent freeware from becoming a risk while still benefiting from legitimate open-source opportunities.


This is a contributed article by Ninonne Kooij, principal business consultant ITAM at SoftwareOne. Click here for more information about the company’s solutions.