Free online services can solve a number of challenges. We are all familiar with great solutions for social networks, maps, co-authored documents, search and video services.
Such services can also provide cost-effective solutions in the public sector. Not only is service free, we can also save the cost for the whole procurement process. A free service means that the rigid public procurement regulations do not apply. This way, the deployment decision can be taken quickly without managemt involvement and we can save the cost to prepare a call for tenders, to evaluate the bids and also the cost for complaints processing.
The free online services are paid by the advertisements embedded in the service, similar to free newspapers. Personal profiles with information about our interests and online behaviour can make the digital advertisements very relevant for the users and therefore valuable for the advertisers. In this business model, the users trade private information against services and advertisements.
Now, the public sector’s use of free services can cause unintended barriers for startups and their innovations. Startups typically do not have access to personal profiles from many users, and will therefore not be able to compete in the market of personalised advertisements, and thus unable to deliver service at zero cost.
To get access to the market of personalised advertisments, a tartup can liaise with one of the larger companies owning personal profiles, or be bought by one of them. Prominent examples include Fast Search and Transfer from Norway, and Skype and Mindcraft based on Swedish initiatives.
Many of the projects supported by the H2020, will have innovative results designed to create jobs and values in Europe. To increase the return on this European investment we need to assure a level playing field to enable more startups to deliver innovative services to the public sector without access to personal profiles.