Spiceworks gives users a taste of new e-commerce feature

Austin, Texas-based Spiceworks Inc. is adding a dash of new e-commerce features to its unique recipe blending social networking and free software, a move it hopes will lure more Canadian users to its Web site.

Spiceworks has been called Facebook for the IT crowd and even bills itself as the world’s largest social business network for IT. Founded in 2006, Spiceworks targets those who work in the IT industry, particularly in the SMB sector. It offers them free IT systems management software to help run their businesses (including network monitoring and help desk software), plus an online social networking site to connect with other IT professionals.

Though the software is free, the site generates most of its revenue through ads. Additional revenue comes from value-added products like social media packages for SMBs, available to Spiceworks members willing to pay for them. For example, users who pay a fee can buy a premium Vendor Page, an enhanced version of a new Spiceworks feature launched in March with upgraded branding and content sharing capabilities.

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In its first five years Spiceworks has grown from 32,000 users in 60 countries to almost 1.5 million users worldwide. Most of its members (60 per cent) hail from North America. The company doesn’t break down its American and Canadian users into individual percentages, but says it has about 64,000 users in Canada. There are a handful of Canadian regional Spiceworks user groups on the site, including ones in Toronto, Saskatchewan and Edmonton.

Spiceworks wants more Canadians to get a taste of its distinct social media flavour in the future. It plans to do that partly through its Spiceworks University, where groups of Spiceworks users hold four-hour tutorials for users in specific geographic markets to introduce them to the site or to go into deeper detail about specific features on it.

“Absolutely, we definitely have plans to launch (Spiceworks University) in Canada as well,” says Spiceworks products vice-president Tabrez Syed, noting that the Canadian user groups are “quite active.”

The four-hour sessions have already been held in the U.S. and will next be introduced in Europe and Canada, Syed says.

Spiceworks unveiled its new RFQ (Request For Quote) feature today. SMBs can use it to solicit vendor quotes for IT goods and services, share quotes with other users, and place orders directly within the Spiceworks network. The process is designed so users can request and receive bids from technology vendors anonymously if they wish.

“Today purchasing is time consuming and tedious to contact various vendors,” Syed says. “Our users can now talk to various vendors, compare them and make smart purchasing decisions.”

He likens the site’s RFQ feature to the advent of travel booking aggregators like Expedia where consumers compare flight prices before choosing airlines and booking their tickets on the Expedia site itself.
LinkedIn, the granddaddy of business themed social media sites with 100 million registered users in 200 countries and territories, raised $8.9 billion in an initial public offering this May, the biggest Internet IPO since Google debuted on the public markets in 2004. Though Spiceworks raised $25 million through a fourth round of venture capital funding in April this year, an IPO isn’t in the cards for the company just yet.
“Not at this time. We’re starting to see that the emphasis on business social media sites is growing, but we don’t have any plans to go public,” Syed says.

LinkedIn is the obvious leader of the business social networking pack – and Spiceworks isn’t fazed by that one bit. Facebook, LinkedIn and other sites have grabbed the bulk of the social networking market. And there are multitudes of companies offering free or fee-based IT management software. Spiceworks has hit on a niche market by offering both through a Web site that’s aimed specifically at the IT professional.
“We’re a little unique so we don’t have explicitly direct competitors,” Syed says.

At the end of day, does Spiceworks consider itself an ad-supported free software provider, or a social networking Web site?

“We consider ourselves more of a social business application,” Syed says. “We wanted to give our users a single pane of glass that integrates all the things they do on a nine-to-five basis.”

Spiceworks announced recently that the latest 5.1 version of its software now comes with Google Apps for Business (allowing users to view and manage Gmail and other Google business apps from within the Spiceworks Web site) and Rackspace Cloud Servers, which offers hosted email management and automatic cloud backup of clients’ Spiceworks software installations and data.

The Rackspace deal is part of a new Spiceworks push to target the cloud sector by partnering with major cloud providers to integrate their backup, hosting and storage offerings with Spiceworks software. Other cloud providers who have teamed up with Spiceworks include HP and Symantec.

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