Occupationsxetentcy: Making Money Software

Will Freemium be the model for software and productivity in the 2010s in the way that SaaS was in the 2000s and Client/Server was in the 1900s? Are users ready to trust the cloud? Will virality subsume other marketing strategies?

The answers were “Yes, yes and yes” at this week’s Freemium Summit East. Time will tell whether these answers are right and all paid software models evolve to layers on top of free offerings. Here are my key takeaways from the conference to help you make your predictions.

#1 — “The risk is not that some SaaS leader comes into your market. The risk is that Phil or Sally sitting two rows from you becomes the leader of your market.” — Matt Holleran, Emergence Capital Partners

Taking this parting shot at the end of his address, Holleran’s slide showed a circle/slash symbol over SaaS (Software as a Service). He observed that Freemium is making its way into a number of industries after its successful deployment in customer service and survey markets, as well as that in-product virality can reduce direct marketing expenses to zero or near zero.

#2 — “Freemium can accelerate your ecosystem growth to let you reach different sized customers, different buying behaviors and different customer end-goals.” — Scott McMullan, Google

Scott showed a layer cake created with the right raw ingredients, mixed properly and presented well as analogous to creating a revenue-generating freemium business model that includes core applications, add-ons, ads and consideration to ecosystem impact.

#3 — “Don’t charge for things that bring more users.” — Jonathan Boutelle, SlideShare

Boutelle’s presentation goes beyond describing how SlideShare discovered the right mix of customer value and in-experience triggers to build its premium service. It’s an insightful exploration of growing a business.

#4 — “Inherent virality comes in multiple flavors.” — Brent Chuboda, SurveyMonkey

Stating that, “seeding virality is really hard,” Chuboda described network effects (applications becoming more useful and powerful with usage and more users) and viral loops (use of the app spreads the brand and demonstrates new use cases and potential users).

And the quotes that speak for themselves:

#5 — “It was risky and scary, but our customers benefited. It’s OK to ask for money if you have a great service.” — Anne Driscoll, Ning, talking about the company’s controversial, yet successful move from freemium to paid earlier this year

#6 — “Don’t forget that free is not a business models.” — Owen Tripp, Reputation Defender

#7 — “Make decisions from data rather than hunches.” — Ryan Holmes, HootSuite

#8 — “Freemium only works if the customer is delighted.” — Thor Muller, GetSatisfaction

#9 — “Reviews are the new sales cycle.” — Amit Kulkarni, Manymoon

#10 — “When you have a charitable component, you can increase volume.” Daniel Freeman, Atlassian on the company’s Causium model

#11 — “We are able to compete against cloud services because we have offered people something free that has captured their mind share. That’s why I love freemium.” — Ranjith, Kumaran, YouSendIt

Slide decks from most of the presenters cited above can be found on SlideShare.

In August the company acquired McAfee, the security software vendor, for nearly $8 billion. Then, the company bought the unit of Infineon that makes the wireless chips used in laptops and smartphones such as the iPhone.

On Thursday, the investment arm of the company, called Intel Capital, said it is making an investment in OpenFeint, a mobile gaming platform that lets developers add social-networking features, like real-time chat, to their applications.

Lisa Lambert, vice president of Intel Capital, said the company was looking to “to build software ecosystems around our platforms. That is a huge part of our strategy over all.”

“We’re not just about PCs anymore,” said Ms. Lambert. “We’re thinking about everything from the back-end that is supporting the system all the way to embedded devices.

Intel, based in Santa Clara, Calif., contributed $3 million to the round, which totaled $8 million altogether.

“We view the online gaming business as one of the hottest areas of growing for mobile devices,” she said. “We can provide the silicon, the Intel microprocessors to power that.”

The move is also the latest sign that mobile products are fast becoming the hottest game devices on the market. Earlier this month, there was another: DeNA, a Japanese social game company, acquired Ngmoco, a Silicon Valley iPhone game developer, for $400 million.

OpenFeint allows game players to add each other as friends, challenge each other to games, compare scores and even chat during gameplay. Currently, the company says, there are more than 45 million mobile gamers using its service and roughly 3,400 games available through the platform, including the popular produce-chopping arcade game, FruitNinja.

Recently, the system expanded to include games powered by the Android operating system, allowing mobile phones users on different operating systems to chat and challenge each other. Apple offers it own mobile gaming solution, called GameCenter, but it is limited to iOS devices. OpenFeint connects iOS and Android, the company said.

Peter Relan, chairman of OpenFeint, said the company would use the fresh influx of cash to expand its data centers, which uses Intel chips.

In addition, Mr. Relan said, the money would go towards rolling out the company’s monetization feature, called OpenFeintX, which will allow developers to offer virtual goods for sale.

“Imagine it you had a Mac and I had a PC and we couldn’t play Farmville with each other on Facebook,” said Mr. Relan. “Users would not tolerate it. We want to provide a social layer that cuts across those silos.”

ABC News airs big exposé on BMW N54 engine problems, lawsuits [w ...

ABC News investigates BMW fuel pump problems – Click above to watch video after the jump ABC News has cottoned on to the story that BMW.

Juan Williams: Fox News Lets 'Black Guy With A Hispanic Name' Host ...

Juan Williams said Tuesday that he's still upset about his firing from NPR, and added that NPR does not understand the Fox News culture or audience. In an interview with Baltimore Sun columnist David Zurawik, Williams said he remains ...

Fox News Crew Gets Scolded At Democratic Meeting (VIDEO)

A Fox News camera crew showed up unannounced at a Democratic meeting in Wisconsin Monday, prompting a confrontation that eventually forced the show's producer into a rather startling admission: he understands why Democrats are wary of ...

apartment property management companies