A new trend shows #freemium days are numbered

I have always been an advocate for free Internet stuff, and I have written a lot about this topic on this blog. My philosophy when it comes to Internet tools has always been and continues to be the following:

<img src=http://"Freemium_to_Premium_Business_Phylosophy.png"?w=812 alt="Business Phylosophy: Freemium to Premium_">

Always look for free Internet tools first. Pay for the tool only when you have to.

Every business person will understand that cash is king. If you do not have to break the digital bank while not compromising your client service, this enhances the opportunity to be cost competitive. However, in my case there have been 2 developments of late.

Firstly, growth in my business, and the associated need to take it to the next level, is increasingly making premium tools a necessary evil.

Secondly, some of the key freemium tools used in my business are starting to phase out the free services.

<img src=http://"Crowdbooster_Phasing_Out_Freemium.png"?w=852&h=35 alt="Crowdbooster Phasing Out Freemium">

I recommended Crowdbooster in my Digi-DIY Tips on 14 May 2012, emphasising at that stage that it is has a freemium option for basic tracking of Twitter reach. This was several months before the eventuality delivered in the email above was brought to my attention. I decided to discontinue this tool when the freemium option expired.

Unfortunately, when Google gave me the second last warning to upgrade my Google Apps for Business – the Gmail for business – to a premium option or risk suspension of my account a month ago, this felt like a gun to my head because I am hooked on this integrated online communication tool.

<img src=http://"Google_Apps_Freemium_Phased_Out.png"?w=655&h=38 alt="Google Apps Freemium Phased Out">

It is my view that Google knows they got most business people (like me) who have been using this free email platform for years “by the balls” *ouch*. The diagram below explains why, in simple terms, it is beneficial to use this Google tool for business communications.

<img src=http://"Google_Apps_for_Business.png"?w=310&h=211 alt="Google Apps for Business">

At $5 for an email account, it is now costing $250 a month (or R2,265 at today’s rate of exchange) for companies with 50 Google Apps email accounts, and this was previously a free service. There are benefits that come with a premium version though, and you can click here to find out more.

A few more tools have phased out the freemium option as well, or look to be in the process of doing so. These include Tweetarchivist and TweetLevel.

The writing is clearly on the wall – freemium days are numbered. An advise to business people of my ilk – ensure you revise your expense projections.

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4 thoughts on “A new trend shows #freemium days are numbered

  1. Yes, as start-ups become the new establishment their freemium offerings often morph into premium. But there’ll always be another start-up somewhere else or even just a new offering from an established player, looking to break into the market with a new product, probably at no cost to users. There’s always a risk involved in migrating from a service that you have been using for years to a new one. But when it comes to the internet, the choice to pay or not to pay is always there. The ubiquity and scale of the internet means that whatever your offering, there’s probably someone else offering a similar product, or a better one, or a freer one. The only question is, what do you as a user have to lose by migrating.

    • Spot on, bra Thati. Its all about the costs and benefits of staying or migrating. This is made even harder by fact that new tools may still have to prove themselves first, and the culture of some businesses encourages a “wait and see” approach as a way to mitigate risks that may be too costly if new the tools fail, or do not last in the market as has been the case in some instances.

  2. This is sad. I think small businesses using these tools should form associations and build their own platforms (owned by the association). This way, they will reduce their costs & they can modify the specific platforms to suite their needs.

    • Thank you for your comment, Joji. I love the power of the Internet, because it has removed the word “impossible” in the vocabulary of those willing to apply themselves.

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