Software Executive Magazine

August/September 2017

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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Is Free The Right Price For Your Software? Why a 23-year-old software company transitioned to a freemium model H U N G N G U Y E N completed large test automation projects, they understand the broken test automation problems. ▶ Price sensitivity: Smaller software development and test automation operations also need a good solution. Typically, they are sensitive to pricing. ▶ Flexibility: There is a need to augment our business model to compete in a very competitive market owned by key open-source and third-party off-the- shelf players. LogiGear wants to expand user adoption and penetrate into new market segments. We want to increase our prod- uct usage by putting our products in the hands of small teams with small or virtually no budgets for tools. Instead of being stuck with difficult-to-use, open-source tools, our easy-to-use, no-coding solution enables these companies to access a comprehensive, enterprise-level solution for a fraction of the cost. With the right business model, free- mium customers, in the long run, will potentially upgrade, increasing sales. FREEMIUM CONSIDERATIONS As we were searching for an additional avenue to broad- en our user adoption and market share, we dug deeper into the freeconomy model. The term "freeconomics" was coined to depict a goods giveaway strategy with the hope of securing sales in the long run. This concept is not new. It is another way of developing and introducing an t LogiGear, we have studied it, implemented it, and enjoyed the results from it. I want to share with you our journey of transforming our business model into a freemium model and some lessons learned along the way. First, let me give you an overview of our product, what it does well, and our business challenges. As the world is moving toward automation, it is natural to see soft- ware testing being automated. With the movement to- ward DevOps, software is developed, tested, released, and deployed rapidly and continuously. However, the key to optimizing DevOps methodology is to auto- mate, automate, and automate. Test automation is one of the big parts of the DevOps pipeline. Our product, TestArchitect, is serving that test automation demand. OUR BUSINESS CHALLENGES, OBSERVATIONS, AND MOTIVATIONS There are many major, well-funded players in this space. Examples include: ▶ Open-source solutions: Selenium and Appium by Sauce Labs ▶ Third-party solutions: Unified Functional Testing by HP, TestComplete by SmartBear, and others ▶ Large customers: Our customers consist of large software development operations; hence, large test automation operations. Because they have A In the product business, capturing user adoption and market share is key to achieving success. If a product is well designed and solves a specific problem effectively, then it's simply a marketing and sales game. You can invest in PR, promotion, digital marketing, lead-gen programs, trade shows, and your sales force. What if you want an alternative strategy? A freemium model might be the answer. SELLING & MARKETING Framework By H. Nguyen IS FREE THE RIGHT PRICE FOR YOUR SOFTWARE? SOFTWAREEXECUTIVEMAG.COM AUGUST/SEPTEMBER 2017 36

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