The epiphany came when they looked at the consumer world: On the Internet, everything wants to be free. Increasingly, thats even true for apps used by businesses (notably Google Docs and Zoho).
The founders wondered: Why is there this line between consumer and business? And: Is that going to stay forever?
Concluding that the move toward free was a cresting wave, they resolved to distribute Spiceworks at no cost.
And free meant all the way free. Were not going to do a premium version, were not going to do some model where you have to buy other features, Hallberg says. We symbolically burnt the ships because we knew if we kept them wed go back to the lifeboats.
(For users who simply cannot tolerate the ads, Spiceworks offers an ad-free version for $20 a month. But Hallberg says only a negligible percentage of users request this.)
The banner ads embedded in its software are only a portion of the Spiceworks strategy. Far more noteworthy and potentially far more lucrative is the community that the company has gathered at its Web site.
Its a community that can largely claim to be IT managers only. Thats because to log-on, you must download and install Spiceworks. Its a great way to keep out the riff-raff and the flamers.
A visit to Spiceworks online forums reveals a thriving give and take among IT managers. Its a constant sharing of the challenges involved with supporting a tech network and an often frighteningly non-tech bunch of fellow employees.
One user posted: Has the economic downturn caused you to take on more non IT duties?
One of the replies: The only thing I've had to do is baby sit the project manager and make sure he's doing his job correctly.
Vendors, of course, are very eager to influence this crowd of frontline decision makers.
We go to over a hundred technology companies that are in our network and we provide all sorts of access to them, in ways well beyond the banner, Hallberg says. We can then have their marketers involved with the community and pose questions, and people will jump all over it.
For instance, the forum questions include: Why should I buy Cisco? and What do you think about Vista and small business?" (That last hot button query received some 350 forum posts.)
Microsoft loves that because they dont get that kind of feedback on their Web site, he says. The responses are the equivalent of a focus group of active potential buyers.
The vendors jump right into the mix. There are companies like Xerox and AMD that have one of their employees in the community, specially marked as an avatar, and they can answer questions, Hallberg says. The firms can target the areas they want to promote themselves in. AMD, for instance, sponsored the virtualization group.
Hallberg stresses, however, that the point is not to flood IT managers with vendors offers.
Nobody wins if ten companies are bombarding the user, he says. Instead, Its a lot better if [an IT manager is] doing their job; they might not even know that they need a back-up solution. They start leaning about it, and Huh, look, Bob posted in the community that hes doing that let me go learn about that.
The vendors love it because they havent wasted all that time trying reach somebody whos not educated yet. And the users love it because theyre learning with their peers and theyre not getting annoyed.
Its not just vendors like Microsoft that benefit from Spiceworks community feedback. The Spiceworks software itself benefits from the active user forum. The forum contains a product feature board in which users vote on various Spiceworks features requests. Think of it as a form of software democracy (though Hallberg says there's a development director who makes the ultimate decisions.)
Clearly, the Spicework story seems to be on the rise. Over the course of 2009 the company will host tech events in which IT managers meet to discuss their approaches and get training. In the next several months events are planned in Boston, Las Vegas, Orlando, Austin and London.