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Spiceworks: IT procurement models must adapt or die

Disrupting the status quo is a delicate matter, says Jay Hallberg

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Spiceworks continues to grow in popularity, with a user base of 2.4 million and aspirations to grow to 3 million by the final quarter of this year. But providing a platform that caters to the needs of IT professionals, vendors, and everyone in between is a delicate matter, according to co-founder Jay Hallberg.

The social business network combines free network management, network monitoring and help desk software with a Facebook-like community of IT professionals. Members can use the platform to discuss issues, share advice and information on particular technologies and services, and get quotes from vendors for new products.

IT vendors can also set up branded vendor pages, converse with members of the community and deliver targeted advertising on the network. Spiceworks claims that 1,200 technology brands are now using the platform, including big names such as Intel, Dell and Microsoft.

In an interview with Techworld, Hallberg admitted that Spiceworks is shaking up some of the legacy IT procurement models, and therefore needs to tread carefully so as not to antagonise its users – particularly the IT vendors, which provide the company's main source of income.

He gave the example of the 'Request for Quote' capability that Spiceworks began trialing last year, which gives IT pros the power to request a quote and submit it to multiple organisations to see who will offer the best deal.

“We're still doing it, but it turned out it scared a lot of our partners; it scared the sales people because suddenly they were like, wait, what is my role in this? Where do I add value?” he said.

“We candidly hadn't thought through all of that, so we decided that the feature wasn't quite ready for prime time and that we would just keep working on it. Since then a lot of the vendors have discontinued their role in Request for Quote, just because their sales organisations were a little uncomfortable with it.”

Of course, there are also many positive examples of how Spiceworks is disrupting traditional IT procurement models. Hallberg pointed to Pertino Networks, a startup in the software-defined networking (SDN) space, whose route to market is through Spiceworks.

“They created a vendor page but we also gave them a private community and we recruited ten beta testers to test out their product. They've now expanded it to another 90 beta testers, and later in Q1 they're going to launch it in Spiceworks,” he said.

“In the past, Pertino Networks would have had to build up a big channel organisation and go through that – the feedback loop on their product would be really long – whereas here they can just say, here's our offering, if you're interested let us know.”

In this case, the resellers are cut out of the equation, but Hallberg said that there is no sense in preserving the status quo at the expense of innovation. For an industry that improves operational efficiency in so many other sectors, IT procurement itself is still relatively unautomated and unintelligent.

Spiceworks has no desire to see people made redundant, but there is a definite sense that these companies must “adapt or die”. IT pros, service providers, business owners, resellers and vendors all still have a role to play, but they need to find better and more efficient ways of doing business.

“In some cases you might be cutting people out but, whenever you do, it always creates opportunities for new people,” said Hallberg. “We've just said we're going to focus 100 percent on the IT pro, and over time vendors will self-select whether they want to participate or not.”

He hinted that one of the big projects for 2013 will be to get more service providers signed up to the Spiceworks Service Provider Directory, which is currently fairly low-key, but makes it easier for IT pros and resellers to find service providers that meet their needs.

“In general, our mission has always been to make things simpler and smoother for both the IT Pro and vendors,” said Hallberg.

“As long as you do that and you have the right intentions, people will be very forgiving about mistakes along the way; whereas if your goal is to make as much money as possible then you're bound to antagonise people.”


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