You are here: Home Contents V18 N1 V18N1_Mai.html
Personal tools

Free Trial with Annoyance Mechanism as an Optimal Strategy in Cybersecurity Software Offering



Full text

Journal of Information Systems Security
Volume 18, Number 1 (2022)
Pages 2562
ISSN 1551-0123 (Print)
ISSN 1551-0808 (Online)
Bin Mai — Texas A&M University, USA
Kutsal Dogan — University of Florida, USA
Information Institute Publishing, Washington DC, USA




In this paper, we study the optimal software free trial offering strategy for cybersecurity software. Cybersecurity software market is characterized by its high customer uncertainty / low customer learning rate, and its low network effects. We focus on the free trial strategy that is common in the cybersecurity software industry but receives little attention from academic investigation so far: free trial offering with annoyance mechanism. We investigate the conditions under which such a strategy is optimal for the cybersecurity software vendor, in comparison with other strategies such as no free trial offering, and free trial offering without nagware. We incorporate the impact of customer uncertainty and customer learning that resolves this uncertainty in our analysis and show how they critically impact this free trial offering strategy. Our analysis indicates that it could be optimal for a cybersecurity software vendor to offer a free trial version with full functionality indefinitely, coupled with a strategically designed level of annoyance mechanism. We further find that annoyance mechanism complements the free trial offering, and total social welfare could be higher in the presence of such strategy.




Software Free Trial, Annoyance Mechanism, Customer Uncertainty, Customer Learning, Network Effects.




Anderson, R. and Moore, T. (2006). "The economics of information security." Science 314.5799, pp. 610-613.

Cheng, H. K., Li, S., and Liu, Y. (2015). “Optimal Software Free Trial Strategy: Limited Version, Time-locked, or Hybrid?” Production and Operations Management, Vol. 24, No. 3, March 2015, pp. 504-517.

Cheng, H. K. and Liu Y. (2012). “Optimal Software Free Trial Strategy: The Impact of Network Externalities and Consumer Uncertainty,” Information Systems Research, Vol. 23, No. 2, pp. 488-504.

Cheng, H. K. and Tang, Q. C. (2010). “Free trial or no free trial: Optimal software product design with network effects,” European Journal of Operation Research, Vol. 205, No. 2, pp. 437–447.

D’Arcy, John and Hovav A. (2009). "An integrative framework for the study of information security management Research." Handbook of Research on Information Security and Assurance. Pp 55-67, IGI Global.

Dey, D., Lahiri, A., and Liu, D. (2013). “Consumer Learning and Time-Locked Trials of Software Products,” Journal of Management Information Systems, Vol. 30, No. 2, pp. 239–267.

Halbheer, D., Stahl, F., Koenigsberg, O., and Lehmann, D. (2014). “Choosing a digital content strategy: How much should be free?” International Journal of Research in Marketing, Vol. 31, No. 2, June 2014, pp. 192- 06.

Ke, D., Ba, S., Stallaert, J., and Zhang, Z. (2012). “An empirical analysis of virtual goods permission rights and pricing strategies,” Decision Sciences, Vol. 43, No. 6, December 2012.

Lancaster, K. (1975). “Socially optimal product differentiation,” The American Economic Review, Vol. 65, No. 4, Sep. 1975, pp. 567-585.

Lee, Y. J. and Tan, Y. (2013). “Effects of different types of free trials and ratings in sampling of consumer software: an empirical study,” Journal of Management Information Systems, Vol. 30, No. 3, Winter 2013–14, pp. 213–246.

Li, M., Feng, H., Chen, F., and Kou, J. (2013). “Optimal versioning strategy for information products with behavior-based utility function of heterogeneous customers,” Computers & Operations Research, Vol. 40, No. 10, October 2013, pp. 2374–2386.

Liu, C., Au, Y., and Choi, H. (2014). “Effects of Freemium strategy in the mobile app market: An empirical study of Google Play,” Journal of Management Information Systems, Vol. 31, No. 3, Winter 2014, pp. 326-354.

Niculescu, M. and Wu, D. (2014). “Economics of Free under perpetual licensing: Implications for the software industry,” Information Systems Research, Vol. 25, No.1, pp. 173-199

Reitinger, P. (2011). “Enabling Distributed Security in Cyberspace: Building a Healthy and Resilient Cyber Ecosystem with Automated Collective Action”, Global System for Sustainable Development, U.S. Department of Homeland Security,

Roma, P. and Ragaglia, D. (2016). “Revenue models, in-app purchase, and the app performance: Evidence from Apple's App Store and Google Play,” Electronic Commerce Research and Applications, Vol 17, May-June 2016, pp. 173-190.

Sacks, M. (2015). “Competition between open source and proprietary software: Strategies for survival,” Journal of Management Information Systems, Vol. 32, No. 3, pp. 268-295.

Shapiro, C. and Varian, H. (1998). Information rules: A strategic guide to the network economy. Harvard Business Press.

Verified Market Research (2021). “Cyber Security Software Market Size”, Report ID 86560,,2021.

Wagner, T., Benlian, A., and Hess, T. (2014). “Converting freemium customers from free to premium--the role of the perceived premium fit in the case of music as a service,” Electronic Markets, Vol. 24, No. 4, pp. 259-268.

Wang, T., Oh, L., Wang, K., and Yuan, Y. (2013). “User adoption and purchasing intention after free trial: an empirical study of mobile newspapers,” Information Systems and E-Business Management, Vol. 11, No. 2, June 2013, pp. 189-210.

Wei, X. and Nault, B. (2013). “Experience information goods: “Version-to-upgrade”,” Decision Support Systems, Vol. 56, December 2013, pp. 494–501.

Zhu, D. and Chang, Y. (2014). “Investigating consumer attitude and intention toward free trials of technology-based services,” Computers in Human Behavior, Vol. 30, January 2014, pp. 328–334.