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Thought Leaders in Cloud Computing: Matthew Dornquast, CEO of Code42 (Part 3)

Posted on Friday, Aug 15th 2014

Sramana Mitra: I can understand why Google is doing that, but as a private company that has to make money to survive and build business value, what is the justification of being in that business of offering something for free?

Matthew Dornquast: There’re a lot of benefits for the business if you know how to harness it and in particular when you accept the reality that as a business, you need to make your money elsewhere. We make our money on the business side of the equation, but the consumer side of our offering offers us a great deal of benefits. The obvious ones are brand awareness. It’s much easier to market and sell something that’s free, and to gain adoption on something that’s free. As long as you can build trusting, reliable, high-quality relationships with individuals, they facilitate the adoption of your enterprise product in the workplace. There’s a definite marketing advantage.

Sramana Mitra: How much of your consumer user base actually translates into paying business users?

Matthew Dornquast: For the segments that we’re targeting in the consumer space, our research shows that there are 20 million individuals that have influence over the software purchasing decisions at work. Our target market in the consumer space, in terms of giving something away, is these 20 million. Those are our high-value free customers that we want to take care of. There’s a rainbow halo effect around them. Another way to look at it is about one in ten people have influence.

Sramana Mitra: Is that reflecting in your business? Is that a hypothesis or is it something that you’ve measured in your business?

Matthew Dornquast: It’s something we’ve measured. The statistics that I gave you is a result of a fairly expensive and detailed quantitative study over the first quarter of 2014.

Sramana Mitra: Your study?

Matthew Dornquast: Our study. We knew anecdotally that it was making a difference. If I were doing an annual sales pitch to my sales force, I would ask them, “Is the consumer product adding value to the sales cycle? Do you get leads? Do they know about us?” We were getting solid feedback, but we wanted to quantitatively understand it, so we did a lot of research.

Sramana Mitra: What does it do now that you have proved quantitatively that this is making a difference? What processes are you following to make that a proactively generation process that feeds into your sales process?

Matthew Dornquast: There’re so many things. In the beginning, there’s the qualitative study then there’s the quantitative study. The output of the quantitative gives you the personas, if you will, to target on the consumer marketing side. In our case, it is the IT-at-home personas. The question now then is how to get to those individuals with your product to raise awareness. That’s the first way that you harness it. You identify the characteristics of the person that is the influencer, and then you target them.

This segment is part 3 in the series : Thought Leaders in Cloud Computing: Matthew Dornquast, CEO of Code42
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