Not even the enterprise application ecosystem is safe from the invasion of freemium services.
Salesforce announced today that it is releasing a free, stripped down version of its twitter-like micro-blogging application Chatter to compete with other free-to-use collaboration services like Huddle and Yammer at the company’s annual Dreamforce conference in San Francisco this December.
Chatter’s pitched as a collaboration tool for businesses with multiple employees strewn across the country. It’s also good for large businesses where communication can be difficult because there are a lot of distractions and minor details to hash out. Chatter users can let everyone know what they are working on and track specific projects and users — much like Twitter users do.
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Chatter is already available as a part of Salesforce’s services, a massive customer resource management suite that many businesses use to manage their finances and other aspects of their business. Chatter’s available to everyone else for $15 a month per user. But that made it hard to justify introducing the business collaboration service into a work environment that hasn’t had any time to try it out, said Kevin Spain, a partner with Emergence Capital Partners and a Salesforce investor.
Meanwhile, other free-to-use enterprise collaboration services have seen some serious growth. Yammer recently revamped its business micro-blogging software to behave more like a Facebook for enterprise users and has seen a lot of success as a result. It’s free to join Yammer, and the company makes money off subscription models for premium services and IT servicing.
That’s what made other freemium services like Yammer so popular — because Yammer users can try it out before they invest in the software’s premium services. In fact, Spain even called on Salesforce to set its micro-blogging service free to let business try it out in order to compete with other collaboration tools like Yammer.
Luckily, Salesforce listened to its users and investors. Salesforce CEO Marc Benioff said 60,000 of Salesforce’s 87,200 customers are currently using Chatter, according to a report from ReadWriteWeb. But that’s largely because the service was marketed as an add-on to its traditional CRM suite. With this freemium version, it’s clear Salesforce has much loftier goals for its micro-blogging application as it is now looking to take on other collaboration services.
Score another one for the freemium revenue model as well. What began with an interesting experiment in video games has exploded into a powerful revenue model that shows up everywhere from social networks to enterprise collaboration tools. A third of the top-grossing apps on the Apple App Store — which include any number of apps — are free to download and make money off the sale of virtual goods and premium services.
VB’s research team is studying mobile user acquisition Chime in here, and we’ll share the results.