freemium route to enterprise, by scott irwin, general partner, rembrandt venture partners

F r e e m i u m t o t h e E n t e r p r i s e

Freemium MeetupFounders Den

9/13/2012

2C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise Incumbents (1990s)

S E R V I C E S

A P P L I C A T I O N S

O S

D A T A B A S E

S E R V E R S

N E T W O R K

S T O R A G E

vs.

vs.

vs.

vs.

vs.

vs.

vs.

3C O N F I D E N T I A L D O N O T R E P R O D U C E

Incumbents Competing (2006)

S E R V I C E S

A P P L I C A T I O N S

O S

D A T A B A S E

S E R V E R S

N E T W O R K

S T O R A G E

4C O N F I D E N T I A L D O N O T R E P R O D U C E

Cutting R&D, Accumulating Cash

2006

2007

2008

2009

2010

$91 Billion

$126 Billion

3.9%

2.3%

Hewlett Packard

Revenue

% R&D

2006

2007

2008

2009

2010

$107 Billion

$244 Billion

Cash Reserves

5C O N F I D E N T I A L D O N O T R E P R O D U C E

Incumbents Competing (2012)

S E R V I C E S

A P P L I C A T I O N S

O S

D A T A B A S E

S E R V E R S

N E T W O R K

S T O R A G E

SAAS

SOCIAL

CLOUD

MOBILE

DEV TOOLSVIRTUALIZATION

SECURITY SYS MGMT

BIG DATA

6C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise 2.0 is…

Software People Enjoy Using

Built on Cheap Infrastructure

Available Everywhere

Freemium

7C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise 2.0 is…

Software People Enjoy Using

8C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise 2.0 is…

Built on Cheap Infrastructure

2001

$15-20 MILLION

24-

36 MONTHS

2012

$1-2 MILLION

6-12

MONTHS

9C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise 2.0 is…

Available Everywhere

10C O N F I D E N T I A L D O N O T R E P R O D U C E

Enterprise 2.0 is…

Freemium Business Model

Revenue

Cost of Sales

Volume

DISRUPTING

11C O N F I D E N T I A L D O N O T R E P R O D U C E

Scott Irwin

sirwin@rembrandtvc.com

Enterprise 2.0: Calling Consumer Internet Entrepreneurs

Enterprise 2.0 GTM Models

1. Part 1: Freemium First, Enterprise Second

2. Part 2: Inside Sales

3. Part 3: Selling Value