The History of Shareware

by Michael E. Callahan
aka Dr. File Finder (tm)

The Very Beginning

To help to clear up some inconsistencies of the past, I'd like you to look at the beginnings of "Shareware" from two perspectives. First, you will look at how Shareware was first used as a marketing concept regardless of what it was called. Once that is established, you'll see how the use of the actual term Shareware came into use and how this chronology varies slightly from the first. For two programmers, Andrew Fluegelman and Jim Button, the idea of letting people try their software before they paid for it, came at almost the exact same point in time. Let's begin in California with Andrew Fluegelman.

The Shareware Concept Coming Together

Andrew Fluegelman created a communications program called PC-TALK. Mr. Fluegelman started out by marketing his program in an unusual way. He would give people the program and then simply request that if they liked it and used it, that they pay for it. For the time, late 1981, this was certainly a different way of doing business. Mr. Fluegelman, however, was not alone in this unique idea.

Around the same time that Andrew Fluegelman was producing PC-TALK, Jim Button, another programmer in Washington State, was doing something similar. Jim had written what was initially a mailing label program that he called EASY-FILE. It later evolved into a full database system. Like Andrew Fluegelman, Jim Button gave his software away, but included a request that users share the program with others. He also requested a "donation" if they liked the program. It can be argued and debated as to which of these men actually came up with the idea first, but does it really matter? What does matter is that these two men both came up with the idea of letting people try their software before they paid for it. Another factor, and possibly the most important, is that Fluegelman and Button got together and decided to compliment the efforts of the other.

Joining Forces

How did they come to meet? Ironically, a person who was evaluating Jim Button's EASY-FILE also had a copy of Andrew Fluegelman's PC-TALK. This user noted that both programs had a similar request for a "donation" and for sharing the program with others. When he mentioned this coincidence to Jim Button, Jim got curious.

Jim contacted Andrew Fluegelman and the two talked at length about their method of marketing software. In an effort to help each other out, three things were agreed upon.

1. Each would reference the program of the other in their documentation

2. Button changed his programs name to PC-FILE, to better fit in with PC-TALK and

3. Both men set a voluntary donation price of $25.00

One difference was that Andrew Fluegelman marketed his software under the term "Freeware" while Jim Button used the term "user supported software." These events occurred in late 1982.

A Variation On A Theme

In early 1983, Bob Wallace, who had just left Microsoft, started his own company called QuickSoft. Bob had written a basic word processing program called PC-WRITE. Using a distribution method similar to that of Fluegelman and Button, Bob started referring to his product as "Shareware." At the time it was almost unheard of to start a commercial company and then market a product via the "Shareware" concept. In addition to what Andrew Fluegelman and Jim Button were doing, Bob Wallace added an interesting new twist.

Bob Wallace also requested a donation for PC-WRITE, but offered an added incentive for doing so. As with PC-TALK and PC-FILE, users of PC-WRITE were encouraged to share the program with others. What was the incentive to "register" PC-WRITE? Getting a commission! Let's say that you paid for the program. When you did, you got a serial number which you could put on the opening screen. Now, for example, let's say that you gave copies of PC-WRITE, complete with your serial number, to five friends. If one of them decided to pay for the program, they would be asked for the serial number that appeared on the opening screen. In this case, since it would be your serial number, you would get paid a commission. Does the commission idea work? Based on my own personal experience, I'd say yes. I paid $75.00 for my first copy of PC-WRITE. Since that time I have received around $500.00 in commissions. An interesting twist that worked out well for Bob Wallace, QuickSoft, and registered users of PC-WRITE.

A Good Idea, But What Do We Call It?

Thus, by late 1983, Andrew Fluegelman, Jim Button, and Bob Wallace were all distributing software under a similar concept. The premise was the same. A person could try out the software and if they liked it they were asked to pay for it. Users were also encouraged to pass the program around to friends, family, and associates. You'll note, however, that each one was calling it something different. For Fluegelman it was "Freeware." Jim Button called it "user supported software" and Bob Wallace was calling it "Shareware." There are reasons why Button and Wallace did not go with Fluegelman's term, but that will be discussed when I talk about each of these "Founding Fathers" as individuals. For now, suffice it to say that Andrew Fluegelman had trademarked the term "Freeware" and thus, no one else could use it. Users of the early PC's were looking for a standardized term to refer to this new form of marketing. It took some doing, but eventually, they got it.

Arriving At A Standard

Once again, around the same time frame, another man stepped into the picture. His name is Nelson Ford. Nelson Ford is a programmer himself and a highly respected member of the "PC Community." Mr. Ford is also the founder of the Public Software Library (PSL). The PSL is an excellent source for obtaining Shareware programs on disk. In 1983, Nelson was doing a small publication on software. Well aware of the problem with using the trademarked term "Freeware", Nelson decided to run a contest and let users suggest a word that could be used in it's place. And the winner was? Shareware! This caused some concern for Nelson, who knew that "Shareware" was already being used by Bob Wallace. Nelson decided to talk with Bob about it. I spoke with Bob Wallace and he recalled the incident for me.

"Yes, I remember that I had started using the term Shareware before Nelson ran his contest. After the contest Nelson and I talked about it. He (Nelson) said he knew that I had been using the term "Shareware", but would I mind if he used it too. I hadn't tried to trademark it so I told Nelson to go ahead. At the time it just seemed like a good idea to have some continuity... a term that people could relate to."

Other program authors now had a 'standardized' term that they could use to market their software under. Thus, the use of the word "Shareware" is credited to Bob Wallace. Since that time, many other program authors have marketed their software under the Shareware concept. Of the original "Founding Fathers", Jim Button became the next one to begin using the term "Shareware" with his programs. To be historically correct, Jim's PC-FILE was released after Andrew Fluegelman's PC-TALK, but before Bob Wallace's PC-WRITE. At the same time, Bob Wallace was the first to use the term "Shareware" with his product. Jim Button, on the other hand, was releasing his program under the term "User Supported Software" and adopted "Shareware" later.

You should now have a better understanding of how the marketing concept that we call "Shareware" today got started and how the actual term came into use. To give you more insight, the next few sections will give you brief biographies of the three "Founding Fathers" and fill you in on their backgrounds. Some of the information will repeat what has already been mentioned, but this has been done to give you a fuller perspective of the events and circumstances that molded the beginning of what we now call "Shareware."

Andrew Fluegelman

Andrew Fluegelman was a successful attorney and also the editor of PC World Magazine. Back in 1982, Andrew Fluegelman wrote a telecommunications program called PC-TALK. He copyrighted PC-TALK and then released it to the public. The program became very popular because it offered many features that other programs did not. Mr. Fluegelman decided to market his own software with a new twist. If people liked it and used it then he was asking them to pay for it. (Sound familiar?) He decided that he should have some kind of catchy name for this marketing idea. The name that Andrew Fluegelman came up with was "Freeware." Today, the term FreeWare means something totally different, but there's a reason why it does. Because of the popularity of PC-TALK, Mr. Fluegelman decided to trademark the term "Freeware." Around the same period of time there were a few other programmers who were considering using the same marketing technique as Andrew Fluegelman. Because the term "Freeware" was trademarked, however, they could not use it for selling their programs. At the time, this caused a minor stir among programmers. Obviously, they had to come up with a different term to use. Because of this fact, the term "Freeware" has come to take on a new meaning. In today's market, a "Freeware" program is one where no contribution is requested or expected by the programs author.

Mr. Fluegelman met up with another programmer by the name of Jim Button. Strictly by chance, Jim Button had had a similar idea and had been marketing his new database under the term "user supported software." Andrew Fluegelman got together with Jim Button and established a means of each helping to promote the other. PC-TALK gained tremendous popularity and for a time it was the communications program to use.

As the editor of PC World Magazine, Andrew Fluegelman did a rave review of Jim Button's PC-FILE in May, 1983. This gave PC-FILE the extra attention that it so richly deserved. Mr. Fluegelman was a driving force in this new area of software distribution and marketing for several years. His program, PC-TALK continued to prosper and is still in use by some people today. Mr. Fluegelman died in 1987.

Bob Wallace

As one of the founders of the Shareware concept, Bob Wallace has played an important role in the development of Shareware software. To give you a better picture of Bob Wallace as a person, I talked with Bob. Bob willingly shared information about his background and his philosophy about Shareware. In several instances, I've quoted him. Born in 1949 in Washington, DC, Bob Wallace first became interested in computing at the age of 12. He decided then and there to become a programmer. "I still find personal computing wonderfully exciting," Bob says. He emphasizes the personal in personal computing. "It's great having that much power at your fingertips. But if it's somebody else's computer, you have to do what they tell you to do." His interest led him to Brown University in 1967, where he worked with Professors Andries van Dam and Ted Nelson on the first hypertext editing systems, FRESS. In 1974, he received a BS in Computer Studies at the University of Washington. He founded the Northwest Computer Society in 1976, worked at the first Seattle computer store from 1976 to 1978, and ran the first Seattle Personal Computer Fair in 1977. In 1978, he became the ninth employee at Microsoft, where he principally worked as architect of the MS-Pascal compiler. Perhaps it was inevitable that someone allergic to "doing what they tell you to do" would form his own company. Bob left Microsoft in 1983. With $15,000 he had saved, he started QuickSoft, to develop a word processing package for the IBM PC called PC-Write. Bob decided to use a new approach to marketing software, for which he coined the term "shareware." People are encouraged to copy and share the software for evaluation, then users of the software are encouraged to pay for it. He explains his reasoning for using shareware:

"Not knowing much about marketing, I knew I could do something people would like, but I wasn't sure I could explain why they would like it. Shareware lets the software explain itself." And "word-of-disk" promotion takes a much smaller bite out of a startup budget than advertising. "I also chose shareware because I wanted to reach a lot of people," he says. "You can look at that in two ways. One, I wanted a high market share for PC-Write. Market share was one key to Microsoft's success. But I also wanted to serve a lot of people. My philosophy is that I want to make a living, not a killing." The first version of PC-Write was released in August 1983. Bob designed the program, like the marketing, to support end users. "A word processor should help people express their ideas," he says. "It shouldn't get in the way -- that's one reason speed is very important. Plus, creating a document is a very individual process, so being able to customize your word processor is important." QuickSoft's mission is to help people create documents. "Helping people write furthers the creation of new ideas. This has two important results. First, it helps people express themselves; it empowers the individual. Second, written expression advances civilization; writing is the tool that permits the evolution of science, medicine, and culture. So, by publishing PC-Write, we're empowering people and advancing society." "And on a further level," Bob says, "helping the creative process is very important to me. In addition to publishing PC-Write, we are trying to build a company and a culture where individual expression can be integrated in working toward a common goal."

Fine artist Megan Dana-Wallace, QuickSoft's first employee and now Vice President, uses her expressive talents in drawing QuickSoft's famous cats. (Megan and Bob were married July 4, 1986.) Bob is also active in helping other software entrepreneurs. From 1983 through 1988, Bob ran a monthly software marketing group. In 1985, he became active on the board of the Washington Software Association, a trade association of Washington State software companies. He was WSA's chairman for the 1986-1987 term. At its peak, QuickSoft employed over 30 people and did over $2 million a year in business, with over 45,000 registered users. Today, Bob Wallace has retired from the shareware business, but PC-Write continues to be sold by another company.

Jim Button

Jim Button first got interested in computers as a hobby in the 1970's. His first personal computer was one that he and his son, John, built in the basement of their home. This machine was so simple, compared to the machines of today, that they only way that Mr. Button could program anything was to use machine language. The first program that Button wrote was one that kept a list for making mailing labels. It didn't stop there.

When the first Apple computer was released Jim Button got one and immediately reprogrammed his mailing label program using the new Applesoft BASIC. It was around this same period of time that Button started to expand the functionality of the program -- turning it into a full database program. While he was working on his program, Easy-File, at night and on weekends, Jim Button was an employee of IBM during the day. When the first IBM PC was released in 1981, Button once again was ready to make a change for the sake of his hobby. Having bought the new IBM, it took him only a few days to convert his program over to IBM BASIC. From that point on, Button continued to enhance his program and gave it away to friends and co-workers. Gradually, the program gained some popularity, at least in the area around Seattle, WA. Little did he know, at the time, that the program he wrote in his basement would someday be in spread all over the country and the world.

Not Just A Hobby

In 1982, Jim Button met Andrew Fluegelman. As part of that meeting, Button ended up changing the name of his program from Easy-File to PC-FILE. The review of PC-FILE that Fluegelman published in the May, 1983 edition of PC World Magazine helped to open up the way for Jim Button and PC-FILE. The review helped to make more and more people aware of the existence of PC-FILE. Swamped with orders, working full-time for IBM, and trying to keep improving the program became a bit much. He had founded ButtonWare, Inc. in September of 1982. In 1984, Button finally quit his job at IBM and went into the software business full time.

At it's peak, ButtonWare, Inc. had annual sales exceeding $2 million and 700,000 users Today, Jim Button (not his real name) is also retired from the shareware business and is pursuing other interests.

I sincerely hope that this history of the shareware concept, along with background on the three "founding fathers" gives you a clearer understanding of how "Shareware" started. Today, it's estimated that the shareware industry does an annual business of $300 million and it's growing. More and more shareware products have entered into the retail channel. Shareware, once scorned as inferior, is now being praised in large computer magazines, newspapers, and on radio and television.