LogMeIn: Freemium Strategy Generates Revenues

LogMeIn: Freemium Strategy Generates Revenues

Give something away for free, then convince customers to spend money with you on something that's even more valuable. That just about sums up the freemium craze in the managed services software market. But the craze is hardly new. LogMeIn, the remote access desktop control software provider, has offered a free limited version of its product ever since the company launched in 2003, notes VP of Sales Andrew Burton (pictured). Here's background on the freemium strategy, and some updates on how LogMeIn works with MSPs.

Basically, the freemium offer gives customers a sneak peak at the full version of LogMeIn Pro 2, which can be used to remotely print and transfer files from computer to computer, share large files without using attachments and even share entire desktops with another person.  With the free version, you can still gain remote access to your computer, but you cannot share files or desktops.

There are several paid versions of LogMeIn that have been developed over the years by using feedback from clients. “We have a very active online community where we get plenty of feedback from MSP’s and Customers,” said LogMeIn Vice President of Sales Andrew Burton. “It’s more like a conversation that straight feedback. We like to hear from our clients and talk to them about the product they use.”

Reaching out to Managed Services Providers

“For MSP’s, if you like LogMeIn Free, you’ll love LogMeIn Central,” said Burton, who has been with LogMeIn for over three years. LogMeIn Central allows customers to monitor many computers from a central location. It was developed after constant feedback from MSP clients who said it took too long to log in to several different devices. LogMeIn Central only requires a single sign-on. Here is a list of other LogMeIn products and some of their features:
  • LogMeIn Hamachi 2: Create virtual networks through public and private networks.
  • LogMeIn Ignition:  Mobile users can connect through the iPhone and iPad and Android. According to Apple, LogMeIn Ignition was one of the top 10 grossing iPad apps of 2010.
  • LogMeIn Rescue: This feature offers increased call resolution with decreased call times, as it provides collaboration tools – like instant chat – so that technicians can quickly identify and resolve connection issues.
  • LogMeIn Backup: Using this feature, customers can store large amounts of data on their mobile devices and setup steady, routine backup sessions.
So far, LogMeIn has about 10.4 million users and 400,000 premium customers, with its headquarters in Boston, Mass. and offices Sydney, Australia, Amsterdam in the Netherlands, London, England and Szeged, Hungary. The company does about 70 percent of its business in North America and 30 percent internationally.

“MSP’s saw the value of secure remote control very quickly,” said Burton. And that’s the value behind the free version of the company’s product. “Our greatest value is providing secure connectivity to any computer-connected device from anywhere.”Our goal has always been to securely connect people to their devices. So everything we design and offer will surely be designed to meet that goal.”

Money Matters

On the financial front, LogMeIn continues to grow. For its third quarter 2010 ended Sept. 30, revenue jumped 34 percent to $25.3 million. Also, net income more than doubled to $4.0 million during Q3 2010 vs. Q3 2009.

Still, competition looms on multiple fronts. While LogMeIn has a huge following in corporate IT, the company's managed services efforts are newer. Generally speaking, MSPmentor hasn't spotted LogMeIn at many of the managed services conferences hosted by vendors and channel associations. Also, numerous remote control companies are firmly entrenched with MSPs. We'll be watching to see how the LogMeIn efforts evolve in the channel.

Additional reporting by Joe Panettieri. Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. Follow us via RSS, Facebook, Identi.ca and Twitter. Check out more MSP voices at www.MSPtweet.com. Read our editorial disclosure here.
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