Businessmodel of LogMeIn

Customer Segments

LogMeIn provides a range of technology and software solutions designed to make professional environments operate more efficiently and reliably. The Company’s customers can be organised broadly into three categories:

• Individuals, comprising members of the general consumer population as well as individual and independent professionals;
• Small and Medium-Sized Enterprises, comprising a range of small and medium-sized businesses across multiple business sectors, including independent accounting firms, real estate business, and law firms;
• Multinational Commercial Enterprises, comprising various multinational groups across a range of industries. LogMeIn’s core market is the US, where its serves a number of commercial entities. It also serves an extensive international client base across the Americas, Europe, and Asia Pacific, in particular generating revenue from customers in the UK.

Value Propositions

LogMeIn provides value to its clients in the following ways:

• Its industry standing and reputation, with the Company established as a reliable and effective provider of business productivity solutions, serving a wide range of commercial enterprises across various international markets;
• Its efficient customer acquisition model, with the Company utilising a range of marketing channels to attract customers, including offering free products to generate word-of-mouth publicity, as well as more formal avenues such as web-based advertising, online search, and broadcast advertising;
• Its established user community, with the Company’s products being used by a tens of millions of clients around the world, through which the Company is able to raise awareness of its various service offerings;
• Its secure and accessible online solutions, with the Company offering a range of productivity and business solutions that utilises secure connections between devices and can be accessed via flexible cloud-based platforms; and
• Its industry expertise and experience, with the Company employing highly-trained technical personnel who are able to ensure that the Company’s products operate effectively and can provide expert technical assistance. ### Channels

LogMeIn operates a corporate website at www.logmeininc.com, through which it provides information on its products, solutions, and corporate activities. The Company operates a separate website at www.secure.logmein.com, through which customers are able to access the Company’s various cloud-based platforms, including the LastPass, LogMeIn Pro, and LogMeIn Central platforms. Customers are able to register new user accounts through the Company’s website, including signing up for free 30-day trials of its various solutions.

The majority of LogMeIn’s sales are preceded by a trial of one of its services, and 98% of its sales transactions are settled via credit card. The Company operates a dedicated sales operations team, which manages the processes, systems and procedures that determine whether or not a trial should be managed by a telephone-based sales representative or handled via its e-commerce sales process.

The Company employs close to 200 telephone sales representatives to manage newly generated trials, and employs a small sales and business development team that concentrates on sales to larger organisations and the formulation of strategic technology partnerships that are intended to generate additional sales.

Customer Relationships

LogMeIn provides its services to customers on a largely self-service basis, with new customers able to register user accounts and aces free product trials through the Company’s website without interacting directly with members of the Company’s sales force.

Customers can then access the full functionality of the Company’s products, manage their account details and subscriptions, and make payments independently.

LogMeIn’s telephone sales teams are able to provide more personalised guidance to customers where necessary, while the Company’s business development representatives work closely with larger commercial clients to ensure that they are getting the best out of the Company’s products and that their individual needs are met. The Company seeks to establish longstanding relationships with its commercial customers.

LogMeIn provides ongoing support to consumers and commercial clients, with customers able to access tailored assistance form dedicated support staff either over the phone or via an online contact form. The Company also hosts a Knowledge Centre on its consumer website, where customers can access a range of online resources such as user guides, videos, and FAQs.

Additionally, LogMeIn also manages a community portal, where users of the Company’s products can interact with one another, share ideas, and collaborate on problems.

LogMeIn operates a number of social media accounts – including with Facebook, Twitter, Google+, YouTube, and LinkedIn – through which it is able to interact directly with customers.

Key Activities

LogMeIn provides a portfolio of cloud-based business and productivity service offerings, seeking to help individuals and businesses connect to their workplace, colleagues and customers. This includes a range of identity and access management, collaboration and the Internet of Things solutions, that are delivered via the cloud as hosted services on a software-as-a-service basis.

The Company operates a range of platforms and cloud-based software solutions, including AppGuru, BoldChat, Cubby, join.me, LastPass, LogMeIn Pro, LogMeIn Central, LogMeIn Rescue, LogMeIn Rescue+Mobile, LogMeIn Backup, LogMeIn for iOS, LogMeIn Hamachi, MeldiumTM, Xively and RemotelyAnywhere.

The Company offers both free premium services to small and medium-sized business, individuals, and multinational commercial groups.

Key Partners

LogMeIn works with a range of partner companies and organisations in the development and delivery of its various solutions. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of services, technologies, and equipment that are utilised across the Company as part of its development and implementation activities;
• Technology and Software Partners, comprising a range of technology companies and software developers that assist in the development and maintenance of the Company’s cloud-based solutions and its IT and communications infrastructure;
• Channel and Distribution Partners, comprising a range of value added resellers, systems integrators, and distributors that help to extend the reach of the Company’s in-house sales and marketing teams; and
• Strategic and Alliance Partners, comprising companies across a range of industries with which the Company collaborates on various joint projects, including in marketing, branding, and development. LogMeIn has a number of partnerships in place. This includes a number of recent partnerships, such as its channel partnership with Continuum, its licensing partnership with Kaspersky Labs, and its strategic tie-up with Lionbridge

Key Resources

LogMeIn’s key resources are its technologies and intellectual properties, its online platforms and solutions, its IT and communications infrastructure, its sales and marketing channels, its partnerships, and its personnel.

LogMeIn’s intellectual property rights are key to the effectiveness of its business model. The Company relies on a combination of copyright, trade secret, trademark, patent rights to protect these properties. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in LogMeIn’s name, including applications entitled ‘Gateway-assisted file transfer’, ‘Network-based quick connect meeting service’ and ‘Motion-based authentication for a gesture-based device’.

LogMeIn additionally owns and or leases a number of physical properties that comprise its network of sales and administrative offices around the world.

Cost Structure

LogMeIn incurs costs in relation to the development of its technologies and solutions, the development and maintenance of its online platforms, the maintenance of its IT and communications infrastructure, the procurement of services, the management of its partnerships, the implementation of its marketing and advertising campaigns, and the retention of its personnel.

In 2015 LogMeIn recorded total operating costs for the year in the amount of $220.09 million. This included research and development expenses totalling $42.60 million, sales and marketing expenses totalling $138.95 million, and general and administrative expenses totalling $33.03 million.

Revenue Streams

LogMeIn generates revenue through the provision of various cloud-based productivity and business software solutions to small, medium and large companies and individuals. The Company derives revenue primarily in the form of subscription fees paid by clients on an annual basis. These subscriptions range between basic and premier packages, with fees costing as much as $1,599 per year.

In 2015 LogMeIn generated revenue for the year in the amount of $271.60 million, up on the $221.96 million recorded by the Company in 2014.