I ran across this article a few days ago and I saw that it was also referenced on Slashdot this morning. The article is titled Better Than Free and is written by Kevin Kelly. The article is not about software specifically as much as any object that could have a free alternative like a bootlegged copy of a movie or a copied version of a book, etc..
Kelly outlines 8 attributes of a transaction which he believes will raise the value above the free alternative. In other words, these 8 attributes are the values which people are willing to pay for. I very good article and worth the time to read because I think it also applies to not only free alternatives but also to lower cost alternatives. For instance, I believe the Immediacy attribute he describes can apply to having on-shore developers versus having off-shore developers. On-shore developers have the advantage in Immediacy because they are in the same office or at least in the same time zone.
I am not sure I am completely sold on Immediacy for all transactions since I have seen developers in the past spend many hours or even days or weeks attempting to configure a free software alternative when easier to configure commercial alternatives were available. Most commercial software excels in the Interpretation category, described by Kelly, where more comprehensive documentation is available and more time is often spent on usability. Of coarse, this is not always the case either.
Anyway, the article is worth reading because I think it gives everyone something to think about in terms of what service you are providing, either as an employee, consultant, ISV, or OEM. For all of these services, there are free or at least lower cost alternatives.