Chapter 2: This is not how SAAS money is made
1. Complete subscription, you can also understand it as: renting instead of selling.
There is a free trial for a period of time, and then the charges start periodically and automatically.
Perhaps, this is what most people think is the most normal way.
Therefore, most companies that switch from the traditional software industry to SAAS will adopt this model. Such as Adobe, Microsoft, etc.
This also has a lot to do with the main TO B of their products.
However, this is really not the only money-making model of SAAS. It may not even be the main way to make money.
At least, all Internet-minded companies will not adopt this approach. In my personal opinion, this approach actually more or less continues the idea of "selling software".
Of course, this method is also suitable for a completely TO B SAAS.
2. Completely free
The Internet is "strange" and "incomprehensible" in the eyes of many people.
There are not only free SAAS, but there are many, and some are the best among similar products.
For example, Google's Gmail, Docs and many other to C SAAS.
Free SAAS, how to make money.
In fact, everyone who works on the Internet knows this.
In short, it relies on traffic and user data to make money. Collect and analyze user needs and match accurate ads in the right place to make money.
In addition, the completely free model is only suitable for to c, not for to b, and there is no need to use this method to do b.
3. Freemium
Probably, most people doing SAAS will prefer this mode.
High frequency is free, low frequency is charged. The main functions are free, and the value-added services are charged.
Make money through free intake and low frequency.
Most of this model is also subscription-based. However, what you subscribe to is part of the value-added services.
Some subscribe to some low-frequency functions, some subscribe to some cloud services or data services, and some subscribe to version upgrades or others.
There are also a small number of charges that are not based on subscription, but on a per-view basis. This is often because the demand itself is relatively low-frequency, and subscription is not suitable for users, but per-view is more suitable.
Generally speaking, companies and products that have transformed from the traditional software industry will often choose the first option, which is full subscription. Even if there is a free part, it is just a "add-on" and just a sales strategy. Companies with strong Internet genes often choose the latter two. However, one company is special.
This is ZOHO.
ZOHO was born in the traditional software industry and has the genes of a traditional software company. Its concepts and products also have obvious characteristics of traditional software.
ZOHO's website solemnly writes this paragraph. In my impression, although its website has changed a lot over the years, it seems that there has always been a similar paragraph:
Privacy has a lot to do with choosing a business model. We chose one that is not in conflict with protecting your information. Our business model is simple: we offer incredible technology at extremely affordable prices. When you find value in what we offer, you pay us for it. We do not have any hidden agendas or back-end deals with advertisers.
No Adjunct surveillance
User tracking (to serve ads) has turned into a full on surveillance. This trend started with B2C services but has started carrying over to the B2B domain as well. At Zoho, we are taking a stance against adjunct surveillance. What does that mean? When you use Zoho products, we do not allow surveillance companies to track you. We have also removed all non-essential or intrusive third-party trackers from our websites. We conduct regular audits to sustain the highest levels of privacy.
Translated, the general meaning is that ZOHO does not make money from advertising, so it does not collect user data because of advertising. They only make money by providing users with better products.
Traditional software companies generally do not pay special attention to collecting, analyzing and utilizing user data like Internet companies. Traditional software companies collect user data mainly to understand how users use their products. Internet companies collect user data mainly to make money. This is a big difference in philosophy between these two types of companies.
Of course, the reasons for this difference are also directly related to the differences in the user groups and markets that these two types of companies mainly target.
However, ZOHO, which has genes in the traditional software industry, has profound and even deep-rooted Internet thinking.
Since 2005, the year when WEB2.0 started, we have turned to SAAS early and integrated the methods of Internet enterprises. It is almost 10 years earlier than Microsoft, which is evident.
Note: Microsoft only began to refresh itself in 2014, after Satya Nadella became Microsoft CEO.
ZOHO has many products. Some are fully subscription-based, while others are freemium. If you look at all ZOHO products as various parts of a product, you will find that ZOHO is a complete free value-added product.
High frequency is free, low frequency is charged.
Business mailboxes, ZOHO Docs, and other high-frequency applications are all free value-added, or even completely free, while other relatively low-frequency applications such as human resources management are completely subscription-based.
Free intake and low frequency to make money.
ZOHO relies on free, high-frequency, and high-quality (the best in similar products) products to attract a large number of users, and then convert free users into paid users, and then into other paid products. user.
Internet routines!
It has strong traditional software genes and profound Internet thinking, and has been very successful.
No matter from any angle, ZOHO seems so different, but if you think about it carefully, it is so reasonable.
It is of great reference value whether it is for friends in the traditional software industry who are switching to SAAS or for those who are working on the Internet.