Free Software a Win-Win?

Sept. 5, 2006
ExperTune’s new CEO offers software free of charge in exchange for a percentage of the savings.
Just six weeks after being named chief executive officer at ExperTune, Kevin Gibbs is sticking his neck out.
ExperTune is so confident that its PlantTriage product delivers bottom-line results, that it is offering to provide the software and services for free in exchange for 25 percent of the savings. The offer, called "Software for Savings," was announced on Aug. 30 by the Hartland, Wis.-based company.
"Some people don't think we're actually going to do it, that it's a stunt," says the British-born Gibbs, a 25-year software industry veteran, who came up with the idea. "We're obviously trying to get attention, yes. But there's real backing behind this."
From talk to action
Gibbs says the idea for the offer came to him after asking a number of the company’s partners and sales representatives for stories of customer experiences with PlantTriage, a performance improvement tool for use in process plants. "I started off just trying to get information that I could feed back to marketing," Gibbs notes. But when he kept hearing tales of large dollar savings, the idea began to crystallize. "When I looked at these savings and then looked at the sales value of the software, the return on investment was invariably much greater than the value of what we sold," he relates.
The PlantTriage Performance Supervision System identifies and prioritizes the biggest opportunities for improvement in process plants. Industries using PlantTriage include oil and gas, metals and mining, chemicals, pulp and paper, and utilities. ExperTune sells the product on a price per control loop basis, considering the number of plants and the number of loops monitored, Gibbs says. The sales price for a large facility with around 2,000 loops might fall typically in the $200,000 range. Measuring savings
If new users take ExperTune up on its free software offer, how will the savings be measured? "We'll have to draw up a contract that says where the metrics are for any given plant for the last 12 months, be it fuel reduction, scrap reduction or whatever measurements we can agree on," Gibbs explains. "Then we'll focus on those measurements and show the improvement over about a three-month period, and then extrapolate that out." The biggest hurdle, he expects, may lie in getting potential new users to provide historical data on key plant measurements.
Gibbs, who joined ExperTune as CEO in mid-July, was previously CEO for SpiritSoft, a London-based software messaging company. He says he is unaware of other software companies that have used a similar "free software-for-shared savings" approach. But "we've worked out the numbers pretty closely," he notes, adding that he is confident that the deal can be a financial winner, not only for potential new customers, but also for ExperTune. "Otherwise, the current [ExperTune] shareholders wouldn't be very happy with me, would they?"