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There is no Free Ride

And the question is who pays for all those free users?

By ownCloud GmbH

ownCloud secure cloud solution for filesharing

Continuing our past thread on the concept of “free” file sync and share for business, there was a very interesting in-depth report out last week from Tech Crunch on the upcoming Box IPO. What struck us in particular was the cost to Box – and the prevalence – of its free users. According to the story:

The cost of supporting Box’s free users, who are an important part of its future profits, is high. Note that the highlighted sum includes various other costs, but given that 93 percent of Box’s users are of the free variety, they are not an insubstantial weight.

So, of course, the question is who pays for all those free users? The article makes it clear: paying customers.

Now, to be fair, ownCloud has millions of free users as well – including organizations with 10’s and even 100’s of thousands of users. The ownCloud Community Edition is often a great test bed for companies before they move to our Enterprise Edition – which has added enterprise-specific features, greater testing and hardening and other attributes. But unlike Box, and other cloud vendors who’s business model is actually selling storage, these Community users actually benefit ownCloud greatly. Often, these “users” give us terrific feedback, bug fixes, extensions, features, translations and more. So, rather than carrying our “free users” on our books as a marketing expense and charging our pay customers to carry them, our community of users actually helps support each other and our Enterprise customers.

We like that equation, and our users and customers – both Community and Enterprise – seem to like it too.

ownCloud GmbH

April 1, 2014

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