Skype the Perfect Freemium Model Essay Example

Skype the Perfect Freemium Model Essay Example Skype the Perfect Freemium Model Paper Skype the Perfect Freemium Model Paper The perfect FREEMIUM model 11/24/2010 Petra Sanyova BCi08: 5th semester: e-Marketing The Freemium Model The term freemium is a coined term, derived from words ‘free’ and ‘premium’. This term stands for an expanding business model where companies are making profits from selling premium products to a small percentage of their total users. Although the majority of the users is not paying anything for the product, companies still has possibility to be highly profitable, and they usually are. The business where only 5-10% of customers generate revenue could not run profitably under traditional conditions. The change was caused by numerous innovations in the field of digital production, as well as internet distribution. Due to these technological progresses, companies are able to copy and distribute free products to many customers at very low costs. Skype â€Å"Skype is software that enables the world’s conversations. † Millions of people make video or voice calls, send instant messages and share files through this program. The majority of them do so with no charge at all. The only prerequisite, to be able to use this software, is that both parties who would like to communicate need to have the program installed and running. Skype was established in 2003, with its headquarters being in Luxemburg. Its founders Niklas Zennstrom and Janus Friis are still partial owners together with investor group led by Silver Lake (that also owns eBay), the Canada Pension Plan Investment Board and Andreessen Horowitz. Since the establishment – the first version of the program, Skype never stopped to grow and is still introducing new updates, features etc. When it comes to its community, the Skype changed from a small unknown program into a program used daily by millions of people with many features. Lately everybody is impressed with the number of Facebook users; nevertheless in the end of year 2009, Skype had 160 million more registered users than Facebook, which in numbers is 560 million. According to the quarterly updates the company issues, it added 39 million registered users in the last quarter of 2009 only. This stands for 6% growth rate in the maturity phase of the product! 36. billion minutes of Skype-to-Skype calls were recorded in these last three months of 2009, adding to get 250 billion minutes of these calls recorded overall. Still in 2009 only, this number accounted for 12% of the world’s international calls. About 23 million users are logged into Skype at its peak times. (I am logged in just as a write this paper. ) Skype is international software, offered in 29 languages and used almost in every single country of the world. Skype offers a variety of features to all its users, with the main feature being Skype-to-Skype calls free of charge. To improve the customers’ experience while calling, it introduced many additional features as: conference calling, video calling and group video calling. Moreover Skype is effectively used for instant messaging and sharing various files; screen sharing included. One of the latest introduced features is called ‘Facebook News Feed and Phonebook’ which enables users to call friends directly from a Facebook News Feed and Phonebook in Skype. Although this all is offered by Skype to its users for free, it does not indicate company’s irrationality. Just because products are free, does not mean companies are not profitable. Google is a great example of this; and however slightly different, Skype is as well. The point is to broaden the classic view of a market from only two parties (buyer and seller) to more parties, from which only few exchange money. The most common model is the three-party system. The third party pays to participate in the system, the first two created by a free exchange between each other. The success of charging nothing for something lies in understanding of the psychological gap between ‘almost zero’ and ‘zero’. As all the other members are needed to create the environment, for others to pay for, it is essential to attract as many people as possible. While the costs are insignificant and free is a word appealing to almost everybody, giving away the product to 90% of customers is reasonable. The rest 10% then consist of the customers who opted for a premium account and they generate revenues. Pareto principle applies This is the case of Skype too. The third party consists of the premium users, who are actually paying for additional features available in premium accounts. This group of users accounts to 6% of its all active users generating over 777 million dollars a year. The additional features, they are then enabled to use are: Skype-to-landlines/mobiles, voicemail, call forwarding, call transfer and text messaging. The user also gets his/her own online number so the landlines/mobiles-to-Skype calls are then also possible. Skype specific success can be accredited not only to the great idea that is making people’s lives easier, but to the way its entire business model is set up: [ 1 ]. SKYPE business model Partners:- Phone manufacturers- Online Platforms| Key activities:-Software development- Integration with new platforms- Marketing| Value proposition:- Free VoIP and video calling- Internet based communication| Relationships:- Appreciative user base- Thanks to free download- Automated with online profiles| Customers:-Not fragmented| | Key resources:- Software- Brand| | Distribution and acquisition channels: Online| | Cost structure:- Very low maintenance cost- Software development| Revenue streams / pricing:- Sale of complimentary items- 7-8% conversion rate from free| And no argument there, that it is set up brilliantly. Conclusion Skype, together with Flickr and LinkedIn, is one of the most successful companies, operating under the freemium model. As was already mentioned, Skype uses three-party model, in which the Pareto principle applies – small percentage of a customers pay to get a premium, covering the cost of the majority of users not charged and still generating the revenues. The reason for this is the almost zero maintenance cost, thanks to technological advancements. For people to purchase the premium accounts is important that the system created is stable and large enough, and so Skype is doing great job in attracting these basic users. By giving the program for free and updating it regularly it does not create only large user base, but an appreciative one. As Skype is a program, which with its features, benefits the ordinary users and possibly save them money – this group is thankful. Being thankful for Skype means being loyal and having overall positive attitudes towards the brand; which is another big asset of Skype. Nowadays it stands for a international brand, which is widely recognized. If company can keep up the conversion ratio, remain popular and hand off the possible threads from new competitors or telecommunication companies; its sustainability of the freemium model can be proved.

Benefits of Working as a Computer Science Expert

Benefits of Working as a Computer Science Expert Why Computer Science Career is So Popular Today? If you want to reach a decent level of living, you can take a look at a career in computer engineering. You can start moving to your goal since school by studying Computer Sciences and Informational Technologies subjects. They are becoming the most important disciplines today. It is better for you to get a Bachelor or even a Master’s degree. But most of all you should focus on developing your computer skills. You will be more appreciated as a professional if you will know more than one programming language and have various skills in this field. What is more, being a computer expert, you will be able to work distantly, from home or any other convenient place. Freelancing is very popular among family people and millennials who do not want to be tied to one place. Also, this type of work opens a lot of opportunities for those, who work far from big cities, as many big computer corporations’ offices are located there. Moreover, new career opportunities appear daily with the development of the IT field. People who have IT education and skills will always be able to find a decent job. You can start a career in the following categories: Administration Design Development Finances Healthcare Nursing. Management Marketing Programming Writing You can see that the knowledge of Business Administration can also help you in obtaining a good career in computer science. All you need is to present the real information from the right perspective. Writing experts can assist you in creating the proper application letter that will get the attention of your potential employer. Computer science requires the implementation of many sciences and fields starting with administrating and business and ending with technologies and biology. The main requirement is to be good at what you do and provide a new ideal for industrial development. You can focus on discovering solutions for problems like: Designing and developing the software. Finding the solutions for technical instruments from the technical and creative point of view. Storing the info, management of the data, networking, and control of communications. New approaches and ways of using computers and electronic devices. Considering this, you can choose from 5 main career options in computer science: Career option 1. Designing and implementation apps for PC and portable devices. Career option 2. Searching for new approaches to PC and portable devices usage. Career option 3. Finding effective solutions for computer issues. Career option 4. Finding effective solutions for any other industry. Career option 5. Planning and organizing the technology infrastructure in any industry. Top Career Choices in Computer Science Below you will find out the most forward-looking career ideas: Market Research Analyst Modern marketing includes many aspects like promotion, sales, and distribution. These elements are connected and require decent management to be effective. To run productive promotional campaigns and increase sales, companies require specialists in marketing research analysis. Usually, these experts work with teams in order to conduct a deep analysis and develop effective business plans. To become a professional in this field, you need to know how to analyze the data, review the available information and study trends and strategies of competitors. Your main task here is to provide a quick company growth. You also have to be able to collect the feedback from your customers, partners, and suppliers, etc. to obtain more opinions on company activity. Your computer science degree will be valuable in this data-focused field, especially if you will have a Master’s degree. Annual salary: $33,500 – $114,000 Operations Research Analyst This career is pretty similar to the previous one. It also requires working with data and managing the information. The purpose here is to find the best solution for the existing issues as well. This job requires knowledge and skills in the following subjects: accounting; finance; political science; manufacturing logistics. But in his position, you will need the assistance of other specialists. You have to know what software used for statistics and what modeling packages to apply. Pay attention to studying statistics in college to be successful in this industry in the future. And do your best to get the Master’s degree. Annual salary: $42,000 $130,000 Systems Software Developer Working with system software does not always mean being a system administrator. This also includes developing apps and software. And experts can find a job in a computer or mobile industry. If you have good engineering and programming skills, you can find a job as a designer, for instance, in a big corporation. This will be an excellent start for an IT career. You will have to develop programs and apps that will be used in computer and mobile industries. And it refers not only to mobile phones but even to the auto interfaces. You should also take into consideration the security aspect of your products. As usual, the master’s diploma will be beneficial in getting a job. Annual salary: $63,000 $151,000 Web/App Developer We all are mobile and web users as we regularly download and use various apps. That is why the developers of web and mobile applications are in such high demand now. Numerous apps are developed annually, and they always have target users and a useful purpose. For developers there are some basic responsibilities: creating websites for e-commerce; controlling company operations; managing of the non-profit groups; conducting social media activity; working together with customers and business partners. To become a web developer, you should be an expert in computers and engineering. You also should be able to work freely with programming languages like HTML, JavaScript, XML, and Cascading Style Sheets. Also, you should be able to check the website after it is completed to make sure everything runs properly and the interface is user-friendly. Annual salary: $33,000 $110,000 Geoscientist Apart from computer science, let’s take a look at another important field, like geosciences. This science is aimed at discovering our planet, so you need to be good at Geography or Geophysics that will serve as a bonus to your computer skills. Tasks for such experts are to model and build up real-life prototypes, and they need usage of complex computer systems. The main purpose here is to study our planet and what opportunities it can bring to us. Geoscientist also should have data analysis and digital mapping skills as well. They have to conduct researches of the issues connected to the Earth. Geology is required as much as computer knowledge here. You can start searching for a job in government or oil and gas industry. Your researching and application skills will be useful for authorities. Annual salary: $49,000 $187,000 As you can see, finding a highly-paid job requires more than just a basic knowledge of computer sciences. You have to be aware of some other industries and be able to conduct connected operations. But if you want to be independent financially and have a decent level of living, you should consider developing skills and obtaining the knowledge required for working in these industries. To save some time for getting extra experience, you can order a research paper from writing experts. But keep in mind that you need to choose only respectful services, as you entrust them a part of your reputation as well.