Freemium in IT
As mentioned earlier the software services industry and the internet industry were amongst the first to use freemium. The freemium model offers obvious potential to such industries as their products are inherently digital in nature and are easily duplicated and distributed digitally.
It is therefore no surprise that Freemium is already a big player in this area. According to calculations in “Free” by Chris Anderson the freemium economy was worth $36 billion in 2008 and is likely to increase manifold in the future.
Industry freemium trends
It is clear that the last few years have seen the price of advertising fall dramatically; this is because people are realizing that it is unrealistic to expect that most services can be supported by advertising alone. This has prompted many to shift to the freemium model.
It is during this slow but gradual shift that freemium model is being calibrated and individual business are finding the right mix of free and paid services/products.
However, the overwhelming feeling from the lessons learnt is that you need to have a free product that offers tremendous value to the users for it to excite them enough to tell their friends and acquaintances and create a viral spread. On the flip side a lot of free value creates a band of loyal users who then are more likely to upgrade to a paid product/service when they need extra value.
Case Studies
The number of internet and software companies using this model far surpasses those from other industries here on this site. It is also for this reason that I have chosen only a few select examples as case studies. The chosen few are some of the best known names in the industry and illustrate the potential of freemium in the industry. These include
IBM (coming soon)
LinkedIn (coming soon)
Guide to use the Freemium model
For those wanting to create and implement a freemium model in this area there is a lot of written material on different blogs. However, it is still short of what I expect. I would especially like to mention Andrew Chen who has a few great posts to his credit. Check out the “resources for creating an IT freemium” for a list.
Sometime in the near future I will write a freemium Step By Step Guide for IT
