Freemium pricing of Dropbox Essay

1. Describe Dropboxs Freemium set outline to accept users and tax tax income. What was this scheme? What did the familiarity hope to accomplish with this strategy? Dropbox is a company providing remote- terminal oer the net profit, corrupt computer storage renovation as well. The Freemium determine dodging is a popular pricing strategy which company provide client a elementary service without paying a dime and premium services were paid. Dropbox offers 2GB smirch storage space for clean-handed and 1TB for $9.99 per month. The basic service attracts millions of node to use and wish it. On the other hand, the major revenue is generated by paid guests which weights 60% of natural revenue. Moreover, pull Houston, the CEO and founder of Dropbox, introduced an incentivize tool to expand the market place. Satisfied users ar much pass oning to recommend Dropbox to their friends, family and co-worker, in turn, they bed get bump storage upgrade.In collective str ain, Dropbox provide paid Dropbox for argument which featured innumerable storage and administrative control. Corporate contribute 40% of Dropbox revenue for the effectiveness Dropbox provided. The freemium pricing and incentive instrument accelerate Dropbox customer acquisition. Although 98% customers be unpaid and generate zero revenue, the epochal amount of user base is authorisation wealth of Dropbox. Dropbox was considered as one of the more than or slight successful companies to offer Freemium price in cloud storage market. Freemium offers customers an opportunity to attempt out a new harvest-festival or service risk of infection-free and cost-free. Meanwhile, Dropbox achieved the objective, two hundred million of user. 1. What were the positive results of this strategy?With Freemium price, Dropbox has 17% market share, and the second market dominator, beside orchard apple tree iCloud, which pre-programmed inside consumer hardware such as iPhone, iPad and laptop. Even several internet monsters began vying a piece of promising cloud storage market, Dropbox was still possessing the second tremendous vendor in the market.In short-term, Freemium Pricing speed up Dropbox user grew from 4 million to 200 million in four years and generate $ cd million revenue by 2012. As well, in long-term, Dropbox builds brand image and cultivates customer habit. With huge potentials, Dropbox is hold deard at over 4 billion dollars. 2. What were the negative results or failures of this strategy, if any? The competition of cloud storage market is very intense, which makes Dropbox profitability less sustainable. Consumers may turned into other giant vendor such as Google, Apple and Amazon. Freemium Pricing and incentivize mechanism draw whatsoever negative influence on Dropbox. guest prefer to get more storage with recommend to friends and their friend will do the same thing to get free upgrade by doing the same thing. This will increase Dropbox operation cost by purchasing more servers and maintain them. For bet on capital investor, great volatility of future day revenue means high risk. The value of Dropbox may be overestimated. Low user conversion rate, vent of customers and make lot always want use Dropbox for free will be hidden risk for Dropbox.3. What was the strategy that Dropbox used for corporate/business customers? Describe this strategy and its results. Firstly, Dropbox was applying the Freemium Pricing dodging to acquire basic users. According to Drew Houston, his goal was to get individuals to use and equal it so much that they, in turn, got their employers to compact up as well. Dropbox was offering a product that people didnt get along that needed until they tried. Free trial gives everyone a chance to try and experience the thingumabob and efficiency Dropbox brings to them. Secondly, Houston built an incentive strategy to stimulate the referral process Users benefit from acquiring more free storage and Houston ge t more customers. The referral hierarchy and accelerate the furtherance of Dropbox.The quick expand of user become more chance that users will bring Dropbox to their workplace. After that, Dropbox holding a bulky share of the consumer cloud storage market. mesh giants stepped into the market, Houston turned his sight on corporate users. Dropbox termed corporate version Dropbox for Business which including unlimited storage space and administrative control. saddle sharing and co-working are become more efficiently than before. Finally, Dropbox achieved another success in corporate users whom become the secondary revenue stream weighted 40% of congeries revenue.4. What other strategies can you think of that Dropbox could perplex chosen, instead of Freemium Pricing? According to news, Dropbox is bout its direction into Big Data analysis. change in product is necessary for Dropbox to mother a new stream of revenue. Freemium Pricing costs too much m and budget on customer cultivating, in exchange, high uncertainty and risk are fatal disadvantage of Dropbox. Alternatively, Dropbox could use perspicacity pricing strategy. They offer the basic service with lowest price and gain comely consumers to gain the market share. The difference amid penetration pricing and Freemium is the cost of customer maintaining is low but they may loss more users when the price raised.