NEW YORK (TheStreet) -- LogMeIn
(LOGM - Get Report) continues to increase its presence in the cloud market and has introduced several products recently to increase its market share.
On Wednesday, LogMeIn, which provides software as a service-based remote connectivity, announced a strategic initiative that changes the direction of the company and will increase revenue. LogMeIn is converting all free accounts to a pay model. Users will have seven days from the time they log in to upgrade to a pay account or lose their account.
By doing this, LogMeIn will see some customers go to competitors who offer the service for free. However, LogMeIn has some benefits that will likely get customers to stick around and pay the price. This should lead to higher overall revenue in the next fiscal year than previously expected.
The stock is currently trading around $34.50 and is up 2.5% on the year.
Paid subscribers continues to be a strong area for the company, and this should help strengthen the business model. In the third quarter, LogMeIn added 21,000 paying subscribers. This grew the overall paid subscriber number to 558,000. LogMeIn has a renewal rate of around 80%. Operating margins increased over 1% thanks to the added paying subscribers in the quarter.
One of LogMeIn's key products is its join.me platform, which was the fastest-growing product in company history. Launched in 2010, the platform has seen 150 million session and saw revenue growth in the triple digits during the third quarter. Over 1.2 million users are on join.me to enhance their company meetings and provide a platform to get work done no matter where employees are. Several large businesses including Amazon (AMZN), Dropbox, Foursquare, Salesforce (CRM) and Urbanspoon are already using the pro paid version of this platform.
LogMeIn has seen continued success with its collaborative relationship with Salesforce. Back in November, LogMeIn was a key presenter at the Salesforce DreamForce 2013 Conference. LogMeIn's Xively platform continues to outperform thanks to a strong relationship with Salesforce. Collaboration cloud revenue represented 21% of the company's third-quarter revenue. Collaborative revenue grew 30% in the third quarter.
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