Freemium Summit East Google Apps Presentation

business freemium at scale Scott McMullan (@scottmcmullan) Freemium Summit East October 25th, 2010

Google Apps Overview How we go to market w/freemium What we've learned about freemium

Messaging & collaboration suite +

In a nutshell, this our freemium

Lots of customers, growing fast 30 Over 30M active users (10M are EDU) Over 3M businesses More than 3,000 new businesses each day 2008 2009 2010

Rough breakdown of the 30 Million "Millions" are paid Premier 10 Million are free EDU "The rest" are free Standard/Other

How we go to market: a) segments & sales teams

5 Editions

8 Customer segments

5 Sales teams

Channel sales too! Channel +SIs +VARs +VARs +VARs +VARs Sales

This is our freemium. Freemium Free Trial Channel +SIs +VARs +VARs +VARs +VARs Sales

How we go to market: a) segments & sales teams b) customer lifecycle

Send prospects to web site

EDUs self-select

Smaller prospects can select Standard

Goal: start a Premier trial (or contact sales)

Active selling done here (1) (3) (2) (4)

That's our go to market... What have we learned about freemium?

Focus on 3 topics 1. Why we like freemium 2. Freemium's impact on direct sales 3. Freemium's impact on channel/ecosystem, including 2 case studies

We like freemium because... entered mature, premium market --> help disrupt large addressable market --> upsell math works existing, free consumers --> product & support leverage our apps have network effects --> lower marketing costs students graduate --> bring expectations to work we know ads --> additional revenue stream broad product --> opportunity for differentiation, add-ons

Think "revenue layer cake" http://www.flickr.com/photos/jamieanne/4657851724/ CC-BY

Freemium: impact on direct sales 3 Sales Teams -------------------- Field sales: > 3k users Telesales: 100 - 3k users Online sales: 1 - 100 users Freemium works because... user cap on free --> limits conflict with sales teams big diverse customer base --> more oppty to sell add-ons self-service DNA --> pilots are easier/cheaper A challenge online sales team competes with free

1. Revenue layer cake Think "use as directed for best results" FREEMIUM: Small biz & EDU only http://www.flickr.com/photos/rapo/2373988909 CC-BY

Freemium: impact on ecosystem VARs Apps Marketplace ------------ --------------------------- 20% discount to VAR 20% revshare to Google Freemium works because... larger customer base --> more "air cover" --> grows appetite for consulting, apps more cloud-savvy user --> better conversion rates A challenge $50/user/year --> pressure on ecosystem prices

1. Revenue layer cake 2. Use as directed for best results Think "helps build multiple channels"

2 ecosystem case studies from Apps Marketplace

Smartsheet.com 3X better paid conversion rates than pay per click Cloud-savvy users easier to sell/support

Sliderocket.com 2.5X better paid conversion rates from trial 5X increase in seats/company

1. Create a revenue layer cake 2. Use as directed for best results 3. Helps build multiple channels Think "You'll find new ways to use it"

Summary: freemium helped us scale 1. Create a revenue layer cake (core, add-ons, ads, ecosystem) 2. Use as directed for best results (right size, right segment) 3. Helps build multiple channels (sales teams, vars, isvs) 4. You'll find new ways to use it (awareness, preferences, ecosystem)

Thanks! @scottmcmullan

http://bagtheweb.com	10
http://localhost.bagtheweb.com	10
http://www.bagtheweb.com	6
http://www.isp.fuac.edu.co	1
http://cm1.omron-iweb.jp	1
http://api.embed.ly	1

Freemium Summit East Google Apps Presentation

by Virtual Goods Summit

Accessibility

Categories

Upload Details

Usage Rights

6 Embeds 29

Statistics

Freemium Summit East Google Apps Presentation Presentation Transcript