From the post:
Back in May 2010 Atlassian, a large innovative software company, revealed that its alternative business model causium had allowed it to donate $500,000 to international literacy improvement charity Room to Read. Now the firm says it has surpassed $2.5 million in donations, and is holding a special event with the charity on May 14th to celebrate.
Causium is an alternative to the freemium business model that many companies–from the Wall Street Journal to Babbel–follow. Under freemium thinking, Atlassian would give away some of its enterprise-grade code for free in order to attract business for its paid services. But instead, the company charges a nominal $10 fee, which it then donates to charity. The fee works in two ways–as a boost to charitable causes, and also to demonstrate to the software’s end-users that the code itself has value.
Atlassian’s President Jay Simons spoke to Fast Company, explaining that the plan has worked better than they expected: “We didn’t appreciate at the time that we were effectively building this annuity stream. Customers that buy the 10-user license will buy it again the following year.” The first year of the plan resulted in some $300,000 in charity donations, and the growth of the company’s reputation since means they donated the same amount in the first quarter of 2013. The donations are important to Room to Read, Simons says, because “they have a reliable funding source” on a regular basis.
Important to note that Atlassian had the market presence to make a causium sales model work.
On that score, see:
Why Atlassian is to Software as Apple is to Design by Mark Fidelman.
and, of course:
Important lessons if you hope to make your software or service a success.