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"Do freemium business models actually work?  The answer is yes for one software company, where freemium served as a perfect way to grow its business and donate more than $1 million to charity at the same time.\nAtlassian recently announced a donation of $1 million to Room to Read, a global non-profit aimed at improving literacy and gender equality education in developing countries. They did this through their \"Causium\" campaign, a twist \u2014 and portmanteau \u2014 of \"freemium\" and \"cause marketing.\" The name fits: Rather than just give away its products for free, Atlassian charged a minimal amount of money and donated all proceeds to the non-profit.\nFreemium runs on the premise that if you give away a curtailed version of your product, your fans will enjoy it enough to then upgrade to a paid subscription. Causium, for all intents and purposes, is freemium in the sense that Atlassian doesn't receive any money from the heavily discounted sales. It does, however, give the product a nominal value and help brand Atlassian as a charity-minded company.\nStarted in 2009, the Causium model raised $100,000 in one week through sales of $5 starter licenses for Atlassian products. When the influx of customers didn't slam Atlassian's customer support, the company began selling 10 user licenses for $10. Right now, it sells approximately 14,000 of these licenses per week, generating close to $80,000 per month for Room to Read, according to Jon Silvers, director of Audience and Community.\nEven if you haven't heard of Atlassian, you definitely know its clients. Atlassian's software helps power major brands like Nike, Cisco, Ikea, Adobe and HP. Given its success, Atlassian initially struggled with whether to go freemium. \"There are a lot of pros and cons to freemium, and whether it is the right approach,\" Silvers said. \"We definitely felt like we kind of stumbled on a way to combine the same concepts of lowering the barriers to entry to your product and how to do that nobly.\"\nMore than a one-off, Causium creates a constant annuity stream for Room to Read that Atlassian donates on behalf of its users. The $10 licenses can be renewed each year to get software fixes and keep customer support. Any upgraded subscriptions will continue to donate $10 of the standard fee to charity.\nDonating to just one charity meant that the company could better track the good that subscribers were doing, Silvers explained. As of 2010, this includes impacting 45,000 children across four countries in Asia by establishing 99 libraries, building four schools and supporting the holistic education of 430 girls. Atlassian makes sure to follow up by sending emails to its users about where their money has gone, said Jay Simons, VP of Sales and Marketing.\nAtlassian has even gone so far as to create a foundation dedicated to charity work. It donates 1% of company and employee time and 1% of company equity to the foundation. Each year, employees are actually given five days of \"foundation leave\" to volunteer at local charities. \nWhile Atlassian has certainly benefited financially from its take on freemium, the organization has done a tremendous amount of good without cutting corners. Causium may not seem like much, but it ably combines social good into an expanding business. Even if it's just $10, Simons said, \"That $10 license means a lot to a little girl in Cambodia.\"\nWhat's your opinion of mixing freemium with charity? Does this make you more or less willing to buy a product from Atlassian? Sound off in the comments.\nImage courtesy of Flickr, Taekwonweirdo"^^<http://www.w3.org/2001/XMLSchema#string>
<http://mashable.com/2011/03/29/atlassian-causium/>