Why IT Managers Are Devouring Spiceworks

IT managers generally are not a particularly excitable bunch. But offer them a free download of software they truly need and you’ll see mass energy in motion.

Such is the case with the Spiceworks IT Desktop, a network monitoring application geared for small and medium-sized businesses. At last count, some 600,000 copies of Spiceworks have been downloaded. And the Spiceworks forum is a thriving community of IT staffers, kvetching and sharing and opining.

The Spiceworks IT Desktop is designed for IT managers at smaller firms whose biggest headache (or one of them) is tracking the patchwork of gear on the company network: printers, routers, servers, PCs and assorted peripherals.

The Spiceworks app tells a manager what software is loaded on each machine, when anti-virus updates are needed, and how much disk space each machine has. It’ll tell you when that pesky printer (the one that usually jams) is low on ink. You can ping a worrisome machine to see if it’s really up and running. (Here’s a tech review of Spiceworks.)

And yes, the software is a free download. No, it’s not open source. And no, it’s not a bare-bones version from a vendor that hopes to sell a premium version. In the world of business software, Spiceworks is riding a new trend: it’s ad-supported software.

Because tech vendors are so eager to get in front of IT manager (read: buyers) at SMBs, Spiceworks has sponsorships with the likes of Microsoft, Dell, AMD. Download the software and you’ll see a quilt of tech company banner ads along the monitoring screens.

The software, says co-founder Jay Hallberg, was developed to fill a gaping need in the SMB world. Hallberg and his fellow founders – who launched the firm in Austin, Texas in 2006 – have plenty of experience in network management. Their resumes include stints at Tivoli (IBM’s industrial-strength network app) and at Steve Jobs’ NeXT.

As they laid the groundwork for the company, their previous experience gave them a strong hunch: SMBs tend to shortchange their network monitoring software.

Big firms, of course, can’t live without top-flight network monitoring. They have teams dedicated to nursing their high-end network tracking apps. But IT managers at smaller firms, say 100-300 employees, often use an odd assortment of utilities, perhaps with a mix of open source apps.

As Hallberg researched the market, “We went to about 30 SMBs, and not one of them was using the same tool.”

It's not that these IT managers don't have a budget for networking monitoring apps. Many SMBs have an annual budget dedicated to buying tech gear. In fact, “These guys might have budgeted $5,000 to buy LANDesk or Alteris, but they were afraid to pull the trigger,” Hallberg says. The IT managers’ reluctance goes like this, he explains: “God, I’m going to have to set aside two months to implement it, then I’m going to have to deal with their sales guys, Oh, what if it doesn’t work, the CFO is going to be on my case. I’m just too busy to implement it.”

Part of the problem is that IT managers at these smaller firms tend to have a semi-infinite workload. With a ratio of employees to IT staff at about 50 to 1, that means a 170-person accounting firm might have 2-3 IT staffers – which means they run constantly.

“They’ve got to do everything and most of the time they’re just running around putting out fires.”

It was in response to these market factors that the Spiceworks founders sat down to develop the program.

“The idea was to create the iTunes of IT,” Hallberg says. “Why can’t we make a network and systems management tool, and ultimately kind of a whole IT desktop, that literally took five minutes to install and get it running?”

What Should it Cost?

As Spiceworks built its software, the company faced a big question: how much to charge for it?

“We knew we didn’t want to do the traditional software licensing model, partly because we have done that for our whole lives,” Hallberg says. “We were used to asking for $1-2 million dollars, shaking them down and creating an antagonistic relationship. We don’t want to do that – it wears you out and you end up hating your customers and vice versa.”

The firm briefly considered open source, but worried that it would take too long to attract a developer community.

Also considered was a monthly subscription model, perhaps for $20 a month. “We did the math and figured we could get a couple thousand customers signed up.” But the problem was apparent. “Hey, if we charge $20 a month, what keeps four guys in Croatia seeing what we’re doing, trying to copy it and charging 10 bucks? Or 5 bucks?”

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