Socialtext offers a compelling package of Enterprise 2.0 services, but it has a problem. While it can talk all it wants about how great its products are, the real selling point is getting customers to use them for themselves. While free-trials work somewhat, the time constraints are limiting. So that’s why Socialtext is moving into the freemium market with its new SocialText Free 50 offering.
Basically, Socialtext Free 50 allows companies to sign-up and get many of Socialtext’s services for free, for up to 50 users. That includes the service’s social networking, wiki, site building and messaging tools. The only constraints are that you’re limited to one wiki workspace (paid accounts offer unlimited), and there is no support beyond the basic online variety. “We think we picked the right line of what can we give away,” Socialtext co-founder Ross Mayfield tells us.
So, you’re pretty much free to open those up to 50 accounts and let the users roam around as they wish. And if you determine you need more accounts, or just more options, there’s obviously an easy path to upgrade. The paid service starts at $6-a-month per user for a hosted plan, or larger companies can opt to pay $1,000 per month, plus $1 or $5 per user based on if they want hosted or on-site capabilities. The full pricing breakdown is here.
Alongside the Socialtext Free 50 launch, the company is also opening up the beta of its new SocialCalc spreadsheet service. SocialCalc’s development was lead by Dan Bricklin, the co-createor of VisiCalc — the first spreadsheet program that was ever made for PCs. It’s been private beta testing for a little while now, but is ready for public testing, Mayfield says. The general release is expected at the end of Q3.
As you might imagine, SocialCalc is a social spreadsheet service. But Mayfield feels it bests competitors such as Google Spreadsheets and EditGrid, because they’re doing more than just reverse engineering the dominant spreadsheet client, Excel. SocialCalc was built to make group editing simple, and to eliminate potential conflict issues when multiple people are editing a document. It offers a way to “work with structured data in an unstructured way,” as Mayfield puts it. And, unlike Google Spreadsheets, SocialCalc can be deployed behind a firewall.
Perhaps more importantly, SocialCalc ties into all of Socialtext’s other offerings (though, unfortunately won’t be included in the Socialtext Free 50 offering as of right now).
We’ve been seeing a resurgence of the freemium model in recent months. It seems to be working pretty well for some consumer-facing products like Pandora, which had a nice offering a couple months ago. It will be interesting to see how it works in the enterprise sphere. CubeTree, another social enterprise offering, launched with the model last month as well.
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If you can’t sell it, give it away.
lol, and begging the question: what happens when u can’t give it away?!
If it did not function properly as a paid service, I don’t think people will just rush towards grabbing it as a freebie. Reputation does account for something!
I would have to agree considering that many companies need to watch out on what they use. But it’s also possible that small businesses could be desperate for a program or just see this first and not bother checking in to other programs or for problems/complaints (if there are any).
I agree
Yes, good word of mouth is nesseseary
Serious question: what advantage is there in using SocialText over something like Elgg running on my own server.
Disagree with the comments about the paid model. Enterprise Learning Management Systems are vastly misunderstood. It certainly is a bold move to try to encourage uptake however, and it will be good to see how Reddot and Knowledge Plaza respond.
Socialtext must be hurting to drop from $15 per user a month to a “sort of” free tool and then $6 a month. That is a lot of revenue to lose. I wonder if current clients will revolt now that the price dropped so much.
When you have tools like PBWorks that has a free wiki, and Socialcast/Yammer/Cubetree that are totally free microblogging…someone’s pricing is off.
Excellent. I have been wanting to use this service for a while now but as we are a startup we don’t have the budget to invest. Having said that our company is aimed at advising other businesses on the tools that the web now offers and I believe that Socialtext could end up getting more business certainly from us as a result of this decision.
Agreed! I have wanted to do this for a while, but cash is always the issue. Oddly enough it can replace more expensive products, but running multiple services until you transition can be costly.
If I were ST, I would include the spreadsheet! It could make the experience. There is a lot of time implicit in Excel templates…
When I see companies lower their price, my first thought is “I wonder if they really ran the numbers and understand the impacts of such a critical decision”.
So from an “outside commenter’s” perspective, who doesn’t have the precise details around the state of their business, I will assume they have run the numbers and are aware of factors such as:
_ Costs > could be minimal, but better understand impact to costs (e.g. – humans and technology)
_ Volume > whenever you lower price, understand the tradeoffs, such as, some prospects that may have chosen a paid offering now may not AND the exponential increase in volume you will now need in the number of paying customers to break-even on the business decision
_ Existing Paying Customers >> understand how this will impact the value perceptions of existing paying customers and have a plan for answering their questions and retaining them
Those are just some. With that said, I do believe they may be justified with this approach (again, I’d need to know more), as the nature of their offering must overcome an adoption hurdle with respect to prospects associating a level of risk in the form of time spent versus value received (e.g. – is it worth investing time to try, or for that matter investing both time and money).
They now have eliminated one of those factors {$$$}, but they still need to focus on compelling value messaging (highlighting their competitive advantages, hope they have some and can defend them) and a customer focused path for converting FREE prospects into PAID customers.
They obviously want to scale and thus their recent decision is to accelerate ROI on this venture. Time will tell, I believe this move could help and I am sure they are watching results carefully.
This move reflects the current economic situation. One has to survive at any cost.
I’m going to test it out as a possible Basecamp replacement. I don’t see an iPhone app though…..
In terms of enterprise Wiki/KB, Socialtext has been killed by Atlassian Confluence. Giving it away wont save it.
I see nothing there that is not free elsewhere, plus you must have a ‘company’ email to use it.
That makes it useless for contract workers and low budget startups.
It’s a great idea, but at least 2 years behind the social media wave.
This is nothing new. Google does the same with Google Apps and it has no limitation except for support. And apps like freshbooks, blinksale, etc all do this. They give a more limited free version and then charge if you want to grow beyond a certain level.
The trick is to get that free account which is usable for startup/test drive in real world space and to convince the users that it is worth paying for more users and features.
I think Freshbooks does a great job in doing this where they allow you to use it for free for upto three clients and then if you want to add more clients you are required to pay. This makes sense as if you have more than 3 clients that means you are probably in a position to pay.
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