37signals' Fried: 'Free is not the future' of apps

MIAMI--Jason Fried of 37signals kicked off the Future of Web Apps conference here with a bang earlier Tuesday.

37signals is known for making project management and collaboration software for the Web. It also features a pricing model for its products, which is somewhat unique for a provider of Web applications.

Jason told the crowd here today that "free is not the future of business." He stressed to the Web app developers and entrepreneurs in attendance that they need to start charging for their applications and that free is not the way to go.

Fried went on to say that it is rare that a company can sustain itself on a free-based strategy and that a pay-based competitor will be able to outlast them.

Harrison Hoffman is a tech enthusiast and co-founder of LiveSide.net, a blog about Windows Live. He is a member of the CNET Blog Network, and is not an employee of CNET. Disclosure.

Especially in these tougher economic times, companies need to make money. Charging for applications is a great way to do it. That's not to say that charging is for everyone, but when applicable, people will pay for a high-quality product like 37signals' Basecamp.

Fried also discussed releasing the byproducts of one's work, as his company has done with Ruby on Rails, which came about as a result of the development of Basecamp.

What do you think? Is free the "future of failure," as Fried suggests, or is it here to stay?