By SUSAN LAHEY
Reporter with Silicon Hills News
This year the Austin company, a professional network for IT professionals, debuted its new app center where Spiceworks network members can find, research and buy apps and cloud services, as well as a program to allow developers to use the Spiceworks platform to offer their own products to the network. The company has had a “one-off” program for years but finally opened it to the entire six million members, said Jay Halberg, co-founder and COO. The company is also offering a new network monitoring system.
The founders also talked about taking the company public in two to five years.
At a program entitled Coffee Talk with the Co-Founders, CEO Scott Abel said Spiceworks’ original business plan was for a desktop management system for small businesses that went for $30 a month. But then he looked at Google’s 1099, the company shifted to a model wherein the network, the software, the tech support and everything else would be free and the company would earn money by selling ads.
Co-founder Greg Kattawar was highly skeptical, said co-founder Francis Sullivan.
“He said ‘Nobody looks at ads!’” Sullivan recalled, “and he’s sitting there, wearing a Nike t-shirt!”
“I did not ever think we’d get to this place,” Kattawar said. “My belief was that this was a novel idea and early on it would fit in with some other company’s business model and we’d get sucked up.”
Instead, the company has raised $111 million including a $57 million investment from Goldman Sachs in February, that will allow it to develop and build products even faster. Halberg said that 70 percent of product ideas come from the Spiceworks’ community and 30 percent are projects that Abel, Kattawar and Sullivan undertake to keep pushing the company to the edge of innovation.
Currently, Halberg said, Spiceworks members comprise about 40 percent of the total market of IT pros. Most of its customers are in small businesses that use Spiceworks’ free software. But, according to Adam Schaeffer, manager of analyst and public relations with Spiceworks, many customers also use Spiceworks to test their products prior to launch and work out bugs. It gives them instant access to the kinds of customers they’re going after.
The company has kept its culture intact with careful management as it has grown. This year, the company is planning to grow again, by a third, adding 100 new employees. But the company is also working to figure out how to take Spiceworks public without ruining its culture. In an interview, Halberg said that even with 300 employees, at least two of the founders has to meet with and sign off on each new hire. Also, the company has a history of transparency. Every Friday afternoon, Halberg said, the whole company has a meeting with the dual purposes of relaxing together and updating employees on new products and the company’s finances.
“A lot of public companies wouldn’t share that,” Halberg said. “So it’s a question…how much information should we keep sharing?”
The two-to-five year timeline give Spiceworks time to make the transition without sacrificing its culture to the “bad behaviors” that strike some companies that go public, like factionalism and office politics.
SpiceworldThe name Spiceworks was devised, Halberg said, because they wanted to “spice up” the IT world which was notoriously boring. Then, eight years ago, the company decided to invite its community of IT pros to a conference. The first Spiceworld took place at the Alamo Drafthouse which “was funky and cool and so us,” Halberg said. But that first conference only had 100 participants. The conference has grown about 50 percent each year and Spiceworks wants to make it the go-to conference for IT professionals and marketers. This year it held its first Spiceworld in London. IT programs included presentations on changes in data storage, going mobile, improving your help desk, large project planning, and disaster recovery. But the conference also has a marketing track that covered issues like IT personas and multiple devices, as well as sessions on IT pros career development.
Wearing a costume that looked sort of like the The Flash, with a San Antonio Spurs jersey (because he lost a bet), Darren Schoen, Director of Technology Infrastructure for Broward Center for the Performing Arts in Fort Lauderdale, Florida, gave a presentation on how IT professionals who aspire to leadership positions have to cultivate skills they previously ignored, like writing for publications, public speaking and networking.Planners have tried to improve the conference every year. Last year, Halberg said, the exhibition hall was strictly vendor tables. This year the organization added giant Spiceworld displays, a Jo’s Coffee cart and more to make the event more festive.
But the important part, said Halberg, is community of people who share apps and intelligence online and get the opportunity to meet and connect in person.