Code 42: Masters of Freemium

You can’t beat free…or can you? Code 42, maker of the award-winning CrashPlan data backup solution, has found its sweet spot through its freemium offering. While the cloud-based service has lots of users at the free level, many of them upgrade to the Pro paid version to get even more features, like cloud backup destination, backup sets and continuous backup. And with companies like Google, Adobe and Cisco using its enterprise services, Code 42 seems to have the golden ticket to success.

Beating Out the Competition

Revenues show why Code 42 is one of our Tech 200: they increased from $3,819,600 in 2009 to $10,805,000 in 2010. Some of that growth is attributed to the shift toward cloud-based services in general, for both personal and business use, says CEO Matthew Dornquast. But while anyone can offer cloud backup, Code 42 offers features its competitors can’t top, like multi-platform support, multiple destination support, mobile apps, great security, and the most important: reliability.

Code 42 has the usual mix of marketing tools in its toolbelt, but the company puts stronger efforts into trade shows, as well as online and traditional advertising. And while the company spends only 5% of its marketing budget on social media, it’s seeing a sizeable ROI from its Twitter strategy. By far, though, is the benefit Code 42 realizes from its freemium model:

“We utilize a wide range of media and programs,” says Dornquast, “But by far our most effective is the fact that we deliver a highly functional free version, which shows prospective customers how easy it is to get their data to a safe place.”

The Future of Cloud

The company is now ten years old, and is profitable. It’s never taken funding, which is unique for a company that’s grown as fast as it has. As for what’s in store for Code 42, Dornquast is a bit quiet: “To keep making great solutions which help computer users protect, access and share their files.” We’re looking forward to seeing what Code 42 has up its sleeve!

About Susan Payton

Susan Payton is the President of Egg Marketing & Communications, an Internet marketing firm specializing in marketing copy, blog and article writing. She is the blogger behind The Marketing Eggspert Blog, and also writes on Small Business Trends, Growth University and BizLaunch. Follow her on Twitter @eggmarketing. Susan Payton on Google+!