Velocix Takes Drug Dealer Approach

The first taste is free, or in this case, the first 500 GB. Velocix is betting on the free business model bandwagon today by giving away its entry-level CDN service.

The move isn’t surprising as CDNs are engaged in a bit of a price war right now. Om wrote yesterday about new startup Voxel, which is offering an ultra-low-cost service piggybacking off Amazon’s S3.

Velocix sees this as a way to better optimize the sales process. Rather than dealing with startups that couldn’t commit to certain service levels, the CDN figures it can identify which customers have the most potential.

“The ones who are successful will be customers,” said John Dillon, Velocix CMO, “One in ten will be successful, when they get close to the 500 GB service, we will upsell the package service.”

To put it in perspective, 500 GB equals roughly 50,000 YouTube video views. And of course there are limitations. The free service doesn’t come with any technical support, and will only do downloads or progressive downloads — not Flash streaming.