2012 Year of Freemium Business Model in B2C and B2B

It started in gaming – 57 out of top 100 app store games are freemiums.
huge companies like Zynga, Electronic Arts and Capcom or from startups like the makers of 2011 Nimblebit (Tiny Tower) and Spry Fox (Triple Town), the free-to-play model is attracting players, making money and, in some cases at least, making good, enjoyable games – it looks like Freemium has won!

Freemium apps to continue flourishing in 2012 (IntoMobile)

Freemium apps are obviously working both for consumers and developers/publishers, and the trend will continue in 2012. Already of the top-ranked 250 iOS apps across all categories, an average of 88% are free to download, monetized with advertising and in-app purchases. In that sense, the research company says that at this time next year in certain categories all relevant iOS apps will be free
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Other big consumer apps like Evernote already freemium or moving there like LogMeIn, which is an interesting case because they were already successful:

LogMeIn Remote Control iOS App Goes Freemium (TechCrunch)

The once paid — and quite expensive app is now migrating to a freemium model. That said, users who paid for LogMeIn Ignition won’t have to cough up the dough for a LogMeIn Pro subscription, but they will get the added premium features including HD remote control (and HD streaming) from their computers to their iOS devices
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We can see this trend spreading also to the B2B market:

Yammer’s Freemium Model Creates a Viral Effect Inside Companies (CIO)

Yammer, who was picked by Apple as 2011 top app, also has a freemium business model, which creates a viral effect inside a company that can spread like wildfire. Once the business value has been proven, organizations can choose to purchase Yammer for the entire organization. By having employees validate whether a product works or not prior to the sale, the company can see if it will be of value to the company. Evangelizing a product is a powerful force, more powerful than ads or sales pitches
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Jive Gets Boost Following Billion-Dollar Cloud Deals (Bloomberg)

It’s interesting to see how Jive, who’s Yammer’s competitors which sells mostly to corporate clients and is using a high-touch sales model, had also come up with an offering of cloud services to reduce their client’s operational costs. It seems to be that the cloud advantages and business potential has found its way to all types of businesses – some of the world’s biggest technology companies, including Microsoft Corp., Hewlett-Packard Co. and International Business Machines Corp., are moving to the so-called cloud, where customers can save money by renting software delivered over the Web and accessing it anywhere, instead of installing it on their own machines.
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However, we should also keep in mind, that for freemium to work it needs to engage users! In order to succeed, a business first priority should be in adding value to users and not earning money.

Matt Gilman, pocketgamer.biz writer said: “The biggest issue for me, in mobile gaming, is the concept of freemium vs premium. It’s hard to discuss it without using the term ‘ethical’ but in a recent conversation with Applifier CEO Jussi Laakkonen, he pointed out to me that what we should be really talking about is ‘fun’.

At the moment, people are making a lot of money, and it’s hard to pinpoint many freemium titles that would deliver ‘fun’ to traditional gamers through a freemium model. Hence, 2012 needs to be the year that freemium truly delivers fun, not derivative rehashed versions of financially successful twaddle, but legitimate gameplay to be proud of.
And of course you need to put compelling offers for upgrade or in app purchase in front of engaged users if and when they have fun”
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Guy Nirpaz

I'm the CEO and Co-Founder of Totango. I love people and technology and I've dedicated my career to tech that will improve the way people do business. Prior to starting Totango I worked in the space of real-time big data as EVP of Engineering at GigaSpaces and as Chief Architect at Mercury.

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