SugarSync Move to Paid Storage Signals Shift Away From Cloud Freebies
NEWS ANALYSIS: SugarSync's plan to charge for online storage is likely only the first in what may become a rush to end the "Freemium" model for providing cloud services."Companies need to build a sustainable business model," Alan d'Escragnolle said, explaining why SugarSync was dropping the company's free data storage plan. d'Escragnolle, who is SugarSync's vice president of marketing, told eWEEK that the company's current free customers would be offered the chance to upgrade their accounts at a 75 percent discount. He also said that if SugarSync users chose not to upgrade their accounts, they would lose access to the data they'd stored there as of Feb. 8, 2014. d'Escragnolle said that while most of SugarSync's business is already aimed at small businesses and users who buy professional-grade services, a consumer-focused free storage service wasn't sustainable over the long run. "The freemium model works best when costs are low and there's a high conversion rate to paid services," he said. "But with storage it's just the opposite." d'Escragnolle said that storage can be very expensive. Perhaps more telling, d'Escragnolle told eWEEK that he expects that a number of other freemium services will transition to a paid model in the near future. Freemium services are services in which a limited number of features are provided for free, with access to more advanced services available for a fee. These services make money by enticing users to upgrade their accounts by making the upgrade very attractive.
d'Escragnolle also said that SugarSync wants to make its user experience better, and to do that it can't afford to give it away. "We need an awesome user experience," he said.