Internet Business models-
The term ‘Freemium’ is coined using two powerful words ‘Free’ and ‘Premium’. It is a business model where one gives away a core product for free and then generates revenue by selling premium products to a small percentage of free users.
The basis of a ‘complementary’ business model is not new, in fact the usual example is the ability to ‘sell’ mustard to go with the purchase of a hot dog! This doesn’t work for us as we usually expect to get the mustard for free. Try going to a restaurant for a ‘fixed price meal’ that looks attractively priced and see how much you pay for drinks plus coffee or tea. That’s where the real margins are made.
Extremely good reference on Business models –
Cloud Computing adaptation –
If you want to make money by getting people and businesses to ‘buy’ a complementary service then you should have a way to deliver it. Delivering a full live & interactive ‘service’ that has to be able to run independently of the people/business using it as part of their process. In other words there are a whole series of major industry players need to get the Cloud Computing model in place - Apply to maximize the use of their ‘services’ and revenues!
Whether IBM or HP, Google or Amazon, Oracle or Microsoft - They all want to create the Cloud Computing model as a way of making a better business model for them.
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Comments?
With advancement in technology new products are “not” staying the market for long.
ReplyDeleteAdvance products come every day in the market and out beat the previous one, this cycle is very difficult to break in current market with so many advance tools in place to get new product on board faster.
This calls for new strategy to break this cycle, one of the strategy is to make your product so much famous in short time span so that you will have very big user community to speak for you.
This will scare new buyer to buy innovative products and force him to loyal to the freemium.
e.g. restaurant search is simple app on iphone. This app is offering location based services.
“urban spoon” is such famous app that ppl. Don’t want to spend 99c on new product at all and upgrading the same app instead.
Urban spoon gave the free version to everyone and created very large user community to follow them and rate them 5 stars.
With so many vendors selling thr same or advance services it’s time to offer new freemium service package and get famous and create existence as soon as possible with loyal customers before your offering becomes dinosaur and fails to collect desire revenue in given timeline.