Spiceworks, the professional network for IT, today announced it has closed a $57 million Series E round of funding led by Goldman Sachs with participation from existing investors. The Series E funding will help Spiceworks expand its global network of IT professionals and technology brands while transforming how IT products are marketed, sold and managed in the $3 trillion IT industry. Spiceworks has raised a total of $111 million through five rounds of funding, and the company has named David Campbell, managing director in Goldman Sachs’ Merchant Banking Division, to its board of directors.
“Spiceworks has reached the tipping point all high-growth, successful social and professional networks experience as they evolve to reshape how we do business,” said Scott Abel, co-founder and CEO of Spiceworks. “As the professional network for IT, we have a unique opportunity to connect IT professionals and technology companies in entirely new ways. By coupling the best professional networks have to offer with tools and resources IT professionals and marketers need to do their jobs, we’re excited to reinvent a multi-trillion dollar industry.
More than 5 million IT professionals and over 3,000 of the world’s leading technology brands use Spiceworks to connect with one another, learn about the latest technologies, and do their jobs more efficiently. Spiceworks is used by IT professionals in more than 200 countries to manage 170 million hardware devices and more than 10 billion traditional and cloud-based application installations. Collectively, IT professionals in Spiceworks spend more than $525 billion on technology products and services each year.
The latest funding round will help Spiceworks accelerate the growth of the professional network for IT by:
- Introducing a new technology platform and app store to give IT professionals the tools they need to manage their entire technology environment from Spiceworks. By coupling the platform with new APIs, Spiceworks will simplify how technology brands, independent developers and even Spiceworks users integrate new free and for-fee applications into a single pane of glass.
- Developing new applications, content, and the engaged community IT professionals need to be successful in their jobs. Spiceworks will also introduce new resources IT professionals can use to advance their careers or find their next opportunity.
- Reinventing the IT marketing and sales process by using Spiceworks’ unique insight into how IT professionals research, buy and manage technology solutions. Spiceworks will develop new tools to help IT professionals and technology brands stay connected through the entire purchase process and as new technologies are bought, deployed and managed. As these tools are rolled out, Spiceworks will continue to help brands adapt and reach their customers and prospects in new, more engaging ways.
“The emergence of professional networks like Spiceworks represents the next wave of social innovation,” said David Campbell of Goldman Sachs. “Spiceworks has a unique platform for technology brands to directly access a rapidly-growing, critical, and underserved market of IT professionals that commands over $525 billion of spend today.”
This guest post is from Kenny Madden of Spiceworks, one of Austin’s hottest startups. Do you sell to technology buyers? You should pay special attention.
(My definition of SMB = any company with less than 1,000 employees.)
There are approximately 17,000 companies globally with more than 1,000 employees. We only start to see the traditional role of CIO’s appear in the enterprise space (1,000 + employee orgs). There are few exceptions of course but not many.
IT vendors who have any interest in marketing/selling tech products to the SMB (regardless of direct/channel models) will have a very hard time time selling software/hardware/cloud products and services to “the” CIO. (He/she simply isn’t there in the majority of companies in this space) There will of course be a few exceptions but not enough to base your selling and marketing strategy.
For clarity here is a breakdown by market segment and general IT:
The Consumer Market: 1 – 10 employees
They tend to purchase products from the mass retail outlets or online retail stores and then look for family or friends to help them set-up and maintain their computers/networks. MSPs and IT service providers occasionally show up.
The S of SMB Market: 10 – 250 Employees
They have small IT budgets. They lack the buying power that larger companies have. This group typically relies on MSPs and VARs to compliment/run IT for them. Typically, these SMBs don’t have a large IT department (mostly between 1 – 5 IT pros if that). They purchase a large amount of all products through VARs/channel partners. They trust their partners and have very strong relationships with them. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers.
The M of SMB Market: 250 – 500 Employees
They have slightly larger IT budgets. Typically, these SMBs have an IT department of 1-10 folks. We start to see VP of IT but still require expertise in depth. They purchase a large amount of all products through VARs/DMRs. They trust their VARs and have very strong relations with them. When they ask their VAR what products/brands they should purchase they usually go with the VARs’ recommendations. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers..
Mid-Market: 501 – 1,000 Employees
They have slightly larger IT budgets than the previous group. Typically, these SMBs have an IT department of 1-10 folks. We start to see VP of IT, CIO, Server, Network but still require expertise in depth. They purchase the majority of products through VARs/DMRs with specific solution orientated practices. However, IT vendors need to generate demand upstream/downstream and get their brands on the lips of IT buyers..
Enterprise Market: Over 1,000 Employees
The “Enterprise” market. The big boys, easy to know, easy to find. Most IT vendors focus on this space. See CIO, CISO, CTO and large IT departments. Enterprise CIOs tend to work directly with Vendors and negotiate price, service levels, etc.
What do to:
Even as IT organizations grow (in staff and responsibilities) the decision makers are “downstream” and are where you want your brand to be. Yes, the CEO, COO and sometimes the CIO is the one that writes the check but always remember this: The IT department may not have the power to say yes, but they most certainly have the power to say no. Focus on the myth of the CIO decision maker and your sales will suffer.
Do not neglect the IT department when marketing and selling technology products, services and/or solutions. Be sure to embrace and engage these critical influencers, while also marketing to the C-Level suite and then engage the IT department to support your sales and marketing efforts.
Don’t fall into this trap:
IT Marketer: “We are not interested in selling to the IT department, we market/sell to the CIO and it flows down from there.”
My opinion is irrelevant so I decided to ask 2 million IT buyers what they thought. I asked, ”As an IT salesperson or marketer, should I include the IT professional in my selling or focus on the CIO?” Here is a sample of responses:
What is a CIO? I am the IT guy for our 250 person law firm in Florida. Me and 2 other guys decide what to buy.
Most of us ARE decision makers…or at least TELL the decision makers what to decide. That’s how it works here.
Only marketing to the C-Suite is the move of someone who knows their product isn’t any good.
I think what so many vendors fail to realize is that while I, as an IT professional, am not the decision maker, I have two very important roles: decision influencer and gatekeeper. If a vendor doesn’t convince me, they don’t make it to the decision maker…and can make or break most IT decisions.
If it is budgeted, I am the decision maker. I make the IT budget, decide what gets in and does not. It gets approved. Then I order.
So you’ve raised your B round, but an IPO isn’t really possible and the bigger fish aren’t yet sniffing around to acquire your company at a price that your venture backers are interested in. How do you sell some private stock to buy that sports car with cash? Welcome to the secondary market.
Shares of stock in companies like Facebook and Twitter are changing hands, even though the stock is not publicly traded yet. How do they do that? Well, I’m sure you have to carve out a bunch of restrictions on your stock, but there are markets out there to facilitate the exchange.
- Bazaarvoice Files for IPO (austinstartup.com)
- Private Stock Transactions Up 73 Percent This Year On SecondMarket (techcrunch.com)
- “Dark Pool” Looks to Bring Pre-IPO Firms to Institutions (allthingsd.com)
Spiceworks™, Inc. today announced that IT professionals at small and mid-sized businesses (SMBs) can now manage and automate printer ink and toner purchasing directly within the Spiceworks social network for IT. The new social commerce feature will make it easier for the 1.6 million IT pros in Spiceworks to keep their printers up and running, while giving ink and toner suppliers access to more than $3 billion in refills every year.
Spiceworks users, who are responsible for managing and maintaining 10.9 million printers for over 1 million businesses worldwide, will now be able to track ink and toner usage levels on networked printers, receive automated alerts when levels run low, and then easily purchase refills – all within the Spiceworks network. The streamlined approach, which helps IT pros to more easily manage the technology purchasing process, is one of the first examples of automated buying within a social business network.
“Today, we’re taking a big step forward in helping businesses automate the last link in the IT management lifecycle – the buying process,” said Scott Abel, co-founder and CEO of Spiceworks. “By facilitating connections between IT pros and technology vendors, we’re creating a passionate community where marketers and decision makers can interact and help each other do their jobs. Whether it’s ink, computer warranties or cloud services, our goal is to make Spiceworks the place for everything IT for technology buyers and sellers.”
“The technology purchasing workflow has typically been a cumbersome part of the IT support workload, especially forsmall and mid-sized companies, who have limited staffing and financial resources.” said Jonah Kowall, Research Director, Gartner. “By integrating social buying, and the ability to gather multiple bids into a free, easy to use platform, businesses can streamline how technology assets are procured and managed.”
The new printer ink and toner buying capabilities are currently available to Spiceworks users in the United States. In the comingmonths, Spiceworks will deploy the features in additional regions around the world.
- Spiceworks Automates Printer Resupply (readwriteweb.com)
- Spiceworks Simplifies IT Management With Newest Update of Helpdesk Software (your-story.org)
Today, Spiceworks unveiled new capabilities that make technology purchasing easier for its 1.5 million users. The new Request for Quote (RFQ) feature automates and simplifies the complex process of purchasing business technology and services by leveraging the social networking features of the Spiceworks community to power e-commerce.
The Request for Quote (RFQ) feature enables small and mid-sized businesses (SMBs) to solicit vendor quotes for technology goods and services, share quotes with peers and place orders directly within the Spiceworks network. The streamlined approach is designed to help automate the last and often most cumbersome part of their jobs – the technology purchasing process.
“Social commerce has changed consumer buying habits, but the approach has yet to take hold among businesses,” said Scott Abel, co-founder and CEO of Spiceworks. “With 1.5 million business professionals in Spiceworks, our community spends more than $260 billion a year on technology products and services. The new RFQ feature is the latest of several capabilities we willunveil that aim to harness the collective-buying power of the Spiceworks network, while also providing technology vendors a way to benefit from the growing wave of social commerce.”
As the first of several upcoming social commerce capabilities to be integrated into Spiceworks, the RFQ feature provides multiple ways for small and mid-sized businesses to streamline the process of purchasing the technology they use every day – from cloud services and hosted e-mail to laptops, desktops and servers.
“For businesses like mine, technology is not an impulse buy but rather, a considered purchase,” said Kevin Burns, Systems Administrator, United Health Centers. “By integrating the automated RFQ feature into my daily workflow, Spiceworks is making the technology purchasing process much simpler, while also directly connecting me with vendors and peers so I can buy in a social way.”
I’m pretty clear about my love for Spiceworks, their business model, the management team, and the investors. Today they announced the results of their fundraising, and even TechCrunch wrote up their obligatory 4-paragraph blost post. Today they announced the closing of a $25 million financing round with new investors Adams Street Partners and Tenaya Capital and participation from existing investors. The series D funding will support expansion of the Spiceworks business model to include integrated commerce within the Spiceworks social business network for IT professionals and technology vendors.
“The average business in the Spiceworks network spends over $275,000 annually on technology,” said Scott Abel, co-founder and CEO of Spiceworks. “By marrying social networking, IT management and commerce, we’re transforming how businesses will discover, research, and buy products and services in the trillion dollar IT industry.”
With more than 25 percent of the world’s small and mid-sized business (SMB) IT professionals in Spiceworks, it’s the largest and fastest-growing social business network for IT. Currently, more than 1.4 million IT pros rely on Spiceworks to discover, buy and manage $244 billion worth of technology products and services each year. Over 200 top technology providers, including Microsoft, Google, Dell and Intel, use Spiceworks to connect directly with IT buyers through the company’s Vendor Pages and social marketing programs.
In addition to helping IT professionals manage their networks, Spiceworks allows them to create purchase lists, renew warranties, and buy cloud services from select vendors. Over the next year, the company will deliver more social commerce capabilities, such as group purchasing and deals, integrated request for quote with the leading technology vendors, and the purchasing of IT products and services built directly into the workflow of the application.
“What Groupon and Facebook are doing for commerce in the consumer market, Spiceworks is doing for IT buying in the business market,” said Jeff Diehl, partner of Adams Street Partners. “The company’s unique blend of IT business applications, community and commerce has created a powerful social marketplace and more efficient channel for the technology industry.”
When your software is used by over a million IT professionals daily, there is an incredible opportunity to tap into their knowledge to identify needs, trends, and budgets. Spiceworks just completed their semi-annual report on technology usage, staffing, spending trends. The IT industry continues to show strong signs of growth as technology budgets, cloud services usage, virtualization adoption, and IT staffing plans among small and mid-sized businesses (SMBs) all showed their strongest gains in more than 18 months, according to latest new report by Spiceworks™, Inc., the largest social business network for IT with more than 1.4 million SMB IT professionals.
These trends were uncovered in the most recent Spiceworks State of SMB IT technology survey, a global study that investigates the latest technology purchasing, usage and staffing trends among small and mid-sized businesses (<1,000 employees). The study of more than 3,000 IT professionals was conducted in January and February 2011 by the Spiceworks Voice of IT® Market Research Program. Survey highlights include:
Significant growth among budgets and staff
- IT budgets in 2011 grew eight percent when compared with IT budgets for the second half of 2010 – the largest increase in more than 18 months. The average annual IT budget for SMBs now stands at $132,000, an increase over the $121,770 previously reported for the second half of 2010.
- Nearly one in three SMBs (31 percent) plan to hire IT staff – the largest increase in the past 18 months. Smaller companies (<20 employees) remain most confident with 33 percent planning to increase IT staff compared to only 17 percent of companies with 20 employees or more. Additionally, more SMBs than ever before (15 percent) plan to add part-time staff.
Substantial growth in cloud and virtualization technology
- Cloud services are now used by 28 percent of SMBs, a 100 percent growth rate frommid-year 2010 (14 percent). By mid-2011, cloud usage among small and mid-sized businesses is expected to rise to 42 percent. In addition, more than one quarter (26 percent) of SMB IT budgets are earmarked for hosted and cloud services. This is up from the 19 percent reported this time last year, representing a 37 percent year-over-year increase.
- Almost one in three SMBs (30 percent) plan to change the way data is stored, moving more data to the cloud. In the first half of 2011, SMBs who plan to change the way they store data plan to reduce their use of local system hard drives and direct attached storage (DAS) from an average of 53 percenttoday to 31 percent by mid-year. Furthermore, by mid-2011, SMBs who plan tochange the way they store data will triple their online/hosted/cloud storage usage from 3 to 9 percent.
- Virtualization is now a cornerstone of SMB IT initiatives with 54 percent of small and mid-sized businesses currently using virtualization and another 20 percent planning to use virtualization by mid-year 2011. Among SMBs currently using virtualization, 54 percent are putting core apps in virtual environments. For the first time, virtualization is the number one planned new software purchase among SMBs with 25 percent planning a new virtualization software purchase.
“Small businesses are responsible for half of all IT spending,” said Jay Hallberg, co-founder and vice president of Marketing for Spiceworks. “All signs point to a good year for the IT industry as SMBs around the world significantly boost investments in technology products and services as well as staffing. Additionally, the hesitation many small businesses previously had toward virtualization and cloud services appears to have dissipated, which bodes well for purveyors of these technology offerings.”
Spiceworks announced the availability of the fifth generation of its free social IT management software application, which is currently used by more than 1 million IT professionals at small and mid-sized businesses (SMBs) worldwide.
Some of the top new features available in Spiceworks 5.0 include the ability to monitor and manage applications, devices and cloud services based on the people who use them within the organization; advanced network configuration management capabilities; and a centralized help desk for Managed Service Providers (MSPs). The new version of Spiceworks can be downloaded for free at http://www.spiceworks.com.
“With Spiceworks 5.0, we’re taking a big step forward in our mission to simplify IT management for small and mid-sized organizations around the world,” said Scott Abel, co-founder and CEO of Spiceworks. “With new features like People View, managing computers and applications is now as easy as connecting with your friends online.”
Additional details on the key new features available in Spiceworks 5.0 include:
- People View Management Interface – allows IT pros to monitor, manage and provision computers and cloud services based on the people who use them within the organization. IT pros can quickly identify a user’s personal machine, email service and usage, help desk ticket history, recently requested purchases, and more – all from a consumer-like interface. People View also provides active directory management capabilities by integrating with Microsoft Active Directory, which allows IT pros to automate the population of employee profile and account information from directly within Spiceworks.
- Purchase List Management – gives IT pros an easy way to track and manage purchases of IT equipment and services, while providing automated status alerts for important warranty and service renewal dates. Integrated throughout the application, organizations can quickly and simply capture items that need to be purchased to resolve problems or fulfill user requests. The new ‘Purchase List Register’ shows all pending purchases and their approval status across the organization.
- MSP Centralized Help Desk & Client Portals – provides customizable client portals as well as a centralized help desk that allows multiple client service requests to be managed from a single console. In addition, the upgraded help desk provides ways for MSPs to work, track and bill for time and purchases – all by individual client.
- Automated Network Configuration Monitoring, Backup and Restore – enables IT pros to automatically scan, backup, compare and restore configurations for network devices, such as switches, routers and hubs. Scans are updated at regular intervals and as new equipment is added to the network. In addition, IT pros are automatically alerted to changes to network configurations. The ‘one-click restore’ feature allows settings and configurations to be remotely restored on network devices using the built-in free TFTP server.
“Managing computers, applications and cloud services no longer has to be a technology-centric task,” said Ben Harned, Network Administrator for Construction Forms, Inc. “With Spiceworks, IT becomes personal because I can manage technology based on the people who use it. In addition, if I need help I’m just one click away from the the largest online community of IT professionals just like me.”
With more than 1 million users in 196 countries, Spiceworks is the most widely deployed and fastest growing IT management application in history. The Spiceworks user community currently supports 37.5 million workers, manages 65 million computers and devices, and spends $199 billion annually on technology products and services.
Spiceworks is enabling ‘Social IT’ by combining network management, network monitoring and help desk software with a rapidly growing and active Facebook-like community of IT professionals. Organizations of all sizes use the free Spiceworks IT management software and integrated online community to collaborate with each other and support the management of both cloud-based and on-premise technology products and services.
Spiceworks today announced that its user base has grown to more than 1 million IT professionals in 196 countries. This milestone makes Spiceworks the fastest growing and most widely used application for managing IT networks in history. In addition, its free ad-supported IT management software and community have evolved into a new type of channel that gives vendors powerful access to research, social media, ads and apps to increase sales of technology products & services.
“More than 20% of the world’s IT pros at small and medium businesses – including law firms, schools, manufacturers, MSPs and more – depend on our free network management software and online community for everything IT,” said Scott Abel, CEO of Spiceworks. “Thanks to the support and dedication of our user community, we’re not only changing how they manage their technology, but also how technology vendors find, connect and market to the hard-to-reach SMB buyer.”
The one million IT professionals using Spiceworks currently support 34 million workers, manage 56 million computers and devices, and spend $173 billion annually on technology products and services. This purchasing power represents more than 10 percent of the global market for IT products and services and is increasing by more than $1.5 billion every week.
The community of Spiceworks users has reviewed more than 20,000 IT products and services and generated more than 330,000 contributions to more than 300 technology, industry and regional discussion groups. Over 200 advertisers, including Microsoft, Rackspace, Symantec and Dell, rely on Spiceworks to research, engage, market and sell their products and services in the SMB market.
“Whether it’s to manage my on-site network or cloud services or to research new products, thanks to Spiceworks I can do it all in one place with insight from one million IT pros,” said Paul Luciano, IT Director of Expand International of America. “My organization also benefits from the direct dialogue with vendors and the discounts I receive on their services due to the buying power of the Spiceworks network. Together, these capabilities make it much easier for me to do my job.”
Spiceworks is enabling ‘Social IT’ by combining network management, network monitoring and help desk software with a rapidly growing and active Facebook-like community of IT professionals. Organizations of all sizes use the free Spiceworks IT management software and integrated online community to collaborate with each other and support the management of their IT networks and services.