“As employees continue to bring their preferred technology to work, management will want to (and eventually) be forced to democratize major enterprise IT decisions. I’m reminded of how Microsoft wouldn’t initially lay cement for sidewalks between new buildings at their Redmond campus. Instead, they would wait six months and then look at the trampled grass patterns that emerged. Similarly, we’re going to see a trend where CIO’s defer to their departmental heads to initially fulfill their own IT needs in an ‘a la carte’ fashion. Only once demands and patterns materialize will it be worth concreting an organization’s path in IT”.—John Arrow, CEO of Mutual Mobile.
One of these “a la carte” items could very well be Spiceworks, a network management software designed for IT professionals. We use Spiceworks at Journyx to help us deliver our cloud-based timesheet solution to customers worldwide. We know Spiceworks very well, even officing in the same complex at one point. Spiceworks allows IT professionals to communicate with each other within the software. I talked to Spiceworks co-founder Jay Hallberg to find out more about the software, which is free for IT pros.
So, how do they make revenue by being 100% free? “We make money in the same way that Facebook or Google does: via relevant ads, by selling ‘virtual shelf space’, and via e-commerce,” says Hallberg.
But to be successful with ads, you need a huge number of visitors to your website who are actually interested in the ads being presented to them. Hallberg describes the audience available to tech vendors: “We have an audience of 1.6 million IT professionals…this audience represents 30% of the IT professionals in small and mid-sized businesses worldwide. We have 2,000 new IT pros that join every day.” So Spiceworks is succeeding in bringing in a large number of viewers to their site.
Also, the audience and vendors seem to match very well, which would result in a higher click-through rate on ads. The collective IT audience on Spiceworks:
· Manages 90 million devices
· Spends $270 billion per year on technology
· Supports more than 52 million employees
As Hallberg describes, the average user is a major player within their organization. “The average IT pro in our network is responsible for well over $100,000 per year in IT budget.” For a technology vendor, this is a valuable audience to reach.
Regarding the relationship between IT pros and tech vendors, Hallberg says, “IT wouldn’t exist without vendors. An IT pro’s job exists because technology is provided by technology companies. That’s why they are so willing and excited to engage with each other in an environment like Spiceworks.”
Vendors can engage with Spiceworks’ audience through:
· Application Plug-ins
· In-App Purchasing
· Vendor Pages
Vendor Pages are also offered for free. Spiceworks’ goal is to be the one-stop shop for an IT professional. “We provide free, basic vendor pages because we want every single technology company, and eventually every IT service provider, in the world to have a presence in Spiceworks,” says Hallberg.
But back to my original question: how does Spiceworks make revenue? Hallberg wasn’t explicit about how much Spiceworks makes but he could tell me this: “We’ve more than doubled revenue every year so far, we have more than 100 employees and our investors are happy.”
Spiceworks’ success is also attributed to the fact that their product is designed like many popular consumer IT products already on the market. Take, for example, a voting feature in Spiceworks: “If we had introduced our chile pepper (voting mechanism) with + and – signs to vote feature requests up or down before Digg and Reddit used these tools, I’m not sure our users would have ‘gotten’ it,” Hallberg says. The vendor pages, which were created earlier this year, are also based off of popular consumer network sites: “Users can choose to ‘follow’ vendors, which is used in Facebook, Twitter, and LinkedIn, and therefore a logical feature for Spiceworks.”
Spiceworks impacts the IT professional community, and its users influence the companies they work for, whether management is on board or not. That is the essence of the consumerization of IT.
So, what are you waiting for? Go sign up! After all, it’s free! Thanks to Jay Hallberg for giving me an inside look at Spiceworks.