In essence SocialText announces that they’ll sell their product at 80% of Yammer’s price (being very brief here) but I think they’re both wrong.
Social has its own Pareto rule: 90-9-1 versus the old-fashioned 80-20. It means that 1% of people creates content, 9% curates it, and the remaining 90% is consuming it. That’s not a very homogeneous group, is it? Yet, when it comes to paying the bill, all of them are considered equal.
Dennis makes a very valid point about the freemium model and when the time comes to pay the bill: this usually doesn’t happen until you have a considerable amount of users on your trial enterprise blogging platform. For real enterprises the size of tens or even hundreds of thousand of employees, I suggestimate this at 5%-10% of the population – meaning that bill will currently vary from 25,000 dollar a month to a possible 500,000.
From 0 to that amount – per month – is a steep rise. It also is a known fact that at least half of the 90% audience only registered and maybe didn’t even log in once, so clearly defying the meaning of user there as we know it. Furthermore, Yammer doesn’t come with an administration tool so it’s impossible to tell who’s who to what extend, and even unregistering users because they left the company is a manual API-process you have to invent yourself. [Disclosure: I have ample experience with Yammer and a good relationship with some of their CxO's and top development and support team, and no experience at all with SocialText].
2011 will be the year of rapidly increasing social monetisation – at least attempts are being, and will be made.
Normally, you only pay for what you use. We all have stuff in the house we purchased once because we thought we needed it, and hardly or even never touched it since. Heck, maybe some of that is still even gift-wrapped or unpacked. But none of us have ever payed for something we then knew wouldn’t need.
That is something I think is holding back most enterprises when they have to pay the enterprise microblogging bill:how much of that is money thrown away? Perception-wise, much more than half of it.
Yammer’s a cloud application. Cloud is a perfect environment for deploying pay-per-use business models. It is odd that you can use enterprise micro-blogging out of the cloud and have to pay for that the old way.
I have witnessed from close-by how companies struggle with going from freemium to fully paid models. Extended trials at some higher levels of access and control follow, expire, it’s a seemingly endless dance around each other, where neither is really sure of the next step to take.
Why not change the business model? Give the admins a tool so they know who makes frequent use of the application, and who doesn’t, and devise the payment model accordingly.
Heck, you might even make the entire payment model dependent on content being voted up or down – how’s that? Content you like will be relatively more expensive, content you dislike will be free and automatically removed after 30 days or so.
You might also reverse the model (slightly going crazy now, apologising up front): users who contribute most will be free from charge, users who contribute least will be charged more – that will get out a really valuable knowledge pool, won’t it? Or will it just increase the volume and drag down the value?
I’m interested in your opinion here – one thing I know is that the current model isn’t working out too well, and could use some improvement.
(Cross-posted @ Business or Pleasure? - why not both)