Freemium Summit East - Google Apps


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My talk from Freemium Summit East (Oct 25, 2010)

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  • Key Message:
    Google Apps is a set of collaboration, and compliance tools built specifically for businesses and designed to address the challenges we have discussed.
    Talking Points:
    Messaging tools.
    GMail - Google's wordclass email client with 25GB of storage per user.
    Google Talk - Real time communication across text, audio, and video right in your inbox. 
    Google Calendar - Enterprise calendering system. 
    Google Groups -  Simple, user-managed, searchable, distribution and sharing lists.
    The best messaging tools available for information workers today.
    Collaboration tools.  
    Google Docs - Word processing, spreadsheets, and presentation built to enhance collaboration and productivity.
    Google Sites - Web site creation tool that doesn't involve IT.  Allow users to easily create sites for themselves, their teams, their projects. 
    Google Video for Business - Upload and share video within your business, to enhance communication and collaboration.   
    These are  next-generation, web-based tools designed for the way we communicate and collaborate today
    For our businesses, we have a few extra features.
    Support for managing your identities in an outside service, including Active Directory and LDAP.
    Connectivity for other clients, like Outlook, Blackberry, and AtiveSync mobile devices.
    And a 99.9% SLA and 24x7 phone support.
    Pricing is simple and straightforward.  The Apps package is $50/user/year.  If you want to add message discovery archiving, it costs $25/user/year for 1 year of retention or $45/user/year for 10 years of retention.
    [CLICK] We also have an archiving option to meet eDiscovery needs with Postini.  This service keeps a full archive of all email traffic for your users (all or some, it's up to you) and allows your administrators to perform eDiscovery searches across them.
    [CLICK] Pricing here is simple too.  An additional $13/user/year for 1 year of retention and $33/users/year for 10 year retention.
    We built Google Apps on a new computing model, often called "cloud computing" that we think allows us great economies of scale and a faster pace of innovation.
  • Best summarized by a layer cake: tasty for many reasons
    just like cake starts w/right raw ingredients like sugar, butter, flavorings
    that all get layered to make a tasty whole
    we started w/ingredients of large market, network effects and existing assets to create
    a core revenue stream
    add-on product revenue streams
    ad revenue streams
  • Best summarized by a prescription: helps, but won't cure all ills, and can hurt if used too much
    some segments get freemium
    some segments get free trial
  • Summarized by this picture: you need different mechanisms to reach all the places you want to go.
    Freemium can accelerate your ecosystem growth to let you reach:
    different size customer
    different buying behaviors
    different customer end-goals
  • Summarized by this picture:
    can use a swiss army knife for a lot of things
    can help you out in unexpected situations
    but again, definitely won't save you in every situation!
  • Freemium Summit East - Google Apps

    1. 1. business freemium at scale Scott McMullan (@scottmcmullan) Freemium Summit East October 25th, 2010
    2. 2. Google Apps Overview How we go to market w/freemium What we've learned about freemium
    3. 3. Messaging & collaboration suite +
    4. 4. In a nutshell, this our freemium
    5. 5. Lots of customers, growing fast 2008 2009 2010 • Over 30M active users • Over 3M businesses • More than 3,000 new businesses each day (10M are EDU)30
    6. 6. Rough breakdown of the 30 Million 10 Million are free EDU "The rest" are free Standard/Other "Millions" are paid Premier
    7. 7. How we go to market: a) segments & sales teams
    8. 8. 5 Editions
    9. 9. 8 Customer segments
    10. 10. 5 Sales teams
    11. 11. Channel sales too! Channel +SIs +VARs +VARs +VARs +VARs Sales
    12. 12. This is our freemium. Channel +SIs +VARs +VARs +VARs +VARs Sales F r e e m i u m F r e e T r i a l
    13. 13. How we go to market: a) segments & sales teams b) customer lifecycle
    14. 14. Send prospects to web site
    15. 15. EDUs self-select
    16. 16. Smaller prospects can select Standard
    17. 17. Goal: start a Premier trial (or contact sales)
    18. 18. Active selling done here (1) (2)(3) (4)
    19. 19. That's our go to market... What have we learned about freemium?
    20. 20. 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
    21. 21. 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
    22. 22. Think "revenue layer cake" CC-BY
    23. 23. 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
    24. 24. 1. Revenue layer cake Think "use as directed for best results" FREEMIUM: Small biz & EDU only CC-BY
    25. 25. Freemium: impact on ecosystem VARs ------------ 20% discount to VAR 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 Apps Marketplace --------------------------- 20% revshare to Google
    26. 26. 1. Revenue layer cake 2. Use as directed for best results Think "helps build multiple channels"
    27. 27. 2 ecosystem case studies from Apps Marketplace
    28. 28. 3X better paid conversion rates than pay per click Cloud-savvy users easier to sell/support
    29. 29. 2.5X better paid conversion rates from trial 5X increase in seats/company
    30. 30. 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"
    31. 31. 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) Summary: freemium helped us scale
    32. 32. Thanks! @scottmcmullan