Original URL: https://www.theregister.com/2013/11/14/spiceworks_company_analysis_part_2/
Concerning Spiceworks' evil plans for world domination
Sadly, there are few volcanic islands in Austin
Posted in On-Prem, 14th November 2013 18:33 GMT
Analysis Spiceworld 2013 In the first article in my two-part series on Spiceworks I discussed the company's ambitions for "owning the stack". Not only does it own the coalface administrator's eyeballs, it is starting to own the relationships that VARs, MSPs, and CSPs have with those coalface admins, each other, other vendors and, increasingly, access to line-of-business resources. In this article I will explore how Spiceworks intends to accomplish this.
A spicy platform
Spiceworks is an Austin, Texas-based company founded in 2006 and has over 200 employees. It also has offices in London and San Francisco and is adding employees around the world.
Currently, Spiceworks is well capitalized, having had at least 4 major rounds of funding worth $54M. It is backed by Adams Street Partners, Tenaya Capital, Institutional Venture Partners (IVP), Shasta Ventures and Austin Ventures.
Spiceworks was cashflow positive last year and it is not a stretch to say they could be so again whenever its chooses. CEO Scott Abel was clear during last year's keynote at Spiceworld that growth was a top priority for Spiceworks in the near term.
Traditionally, the Spiceworks application has been a sort of mid-range network monitoring application married to passable help-desk software. It's better by far than many of the other freebie offerings on the market, but it will never be all things to all people. There is a reason that enterprises pay big bucks for high-end management solutions, and Spiceworks will never match many of these applications on its own.
Look at the feature requests for Spiceworks and you will find more than 3,000 entries. Spiceworks cannot meet those needs with first-party development. Plug-in growth is slow, in part because developing plug-ins for Spiceworks is a pretty miserable affair. This is set to change.
Spiceworks is evolving. As the company fully embraces its destiny as a vertically integrated social network its signature application is evolving from a standalone app into a platform, replete with its own app store.
The idea is simple: Spiceworks provides a base application that does network discovery and management. It will post APIs that developers can code "apps" (plug-ins) to. Vendors code support for their software into an app and users can select apps they wish to install. This is pretty standard, so far as these things go.
Application en voie de developpement
To be blunt, the software side of the equation hasn't been fully fleshed out yet. But for all the gaps in theory or implementation, I have little doubt that the major issues will be identified and dealt with, in due course, as Spiceworks has a history of actually listening to its user and vendor communities.
If Spiceworks has an attack surface it's the core application. Starting from scratch, a small, dedicated team of programmers could – with the right design model – recreate a more extensible and scalable Spiceworks in about a year.
Facebook, Google, Microsoft are just three examples of companies that could replicate the Spiceworks application at will. They have the resources, technology and manpower to build a similar network management tool and provide a "platform" for vendors to plug their apps into, if they felt for a brief moment that it suited them to do so.
Some of the better free software out there (click to enlarge)
While I'm sure that someone coming along and duplicating their application would make developers at Spiceworks deeply unhappy, at this point, besting their core application or platform wouldn't even slow Spiceworks down.
Profiles
Spiceworks' real trick is the brand new ’profiles’. The brainchild of Tabrez Syed, Spiceworks' VP of product management, Profiles are a visual way for IT professionals to "show off" their life's work.
By way of example, Syed cites photographers. A photographer can build a portfolio of his best works to show others. It takes a writer minutes to knock together a webpage with hyperlinks to her best articles or novels; doctors and scientists often assemble portfolios of their best published papers.
But the closest that most IT types get is a LinkedIn page or a resume. This is dry, bland and doesn't really tell you much about the individual or the works accomplished. Like a paper resume, these ‘websumes’ are formulaic and often embellished. The adventuresome ones will choose non-standard job titles or descriptions; my use of Brain in a Jar being positively risqué by LinkedIn standards.
If you wanted to get a sense of the flavour of the individual you could try Twitter, but even that's a crapshoot. Twitter might tell you something about the person, but it doesn't really tell you much about the projects he or she has worked on. (If you dig through the inane drivel on my Twitter account you might be able to data mine something useful. Mostly you'd realise that I am addicted to coffee, like Portal references and enjoy trolling Peter Bright.)
Enter Spiceworks profiles. Everything about them is project-based. Instead of talking about who you worked for or what you like, you build a portfolio of what you've done. The idea is to toss a video – or some pictures – alongside a brief description of whatever server upgrade, data center refresh, middleware rewrite or what-have-you that you're particularly proud of and show the world.
Highlight the technologies and products you've used during your project and they'll show up on your profile. In theory, this creates a much better representation of your professional experience than LinkedIn's resume-driven conceptualisation and a better feel for the professional character of the individual than Twitter ever could.
Combine this with the recent launch of Spiceworks' job board and I'm sure even the readers possessed of the least amount of care are sufficiently awake to connect the relevant dots.
Plot holes
The concept behind Spiceworks profiles is industry-changingly great, but the messaging surrounding "Spiceworks as your means of showcasing your work" needs some real work if it's going to appeal to a bunch of introverts who often count among those achievements "having written a whitepaper". Suffice it to say there's a requirement for the evolution of acceptance of more traditional mediums of self-expression in Syed's brave new spicy world.
PR manager Adam Schaeffer fills in Spiceworks' view: "New profiles + projects [are] a very natural extension of the traditional resume. Our profiles, as you know them, still exist so IT professionals can absolutely highlight traditional components you'd find in a resume (who you work for, certifications, etc). Projects just add a new dimension to the profiles. We certainly didn't intend to dismiss the written word in how we discuss profiles/projects. In fact, the written description is an important component in both the IT pro profile and the projects they create."
This devotion to the written word allows for 500 words in which to describe your life's major achievements. Although my editor will cheer anything that forces me to keep information density high and word count low, I think this is nowhere near enough room to describe most of the projects I've worked on.
The other issue is the notion of "followers". In the Spiceworks of old "followers" were functionally irrelevant. They didn't really serve a phallic measurement purpose within the Spiceworks community and the community interface itself made the "feed" you got from following others noisy to the point of uselessness.
Following people still has no tangible benefit within the existing community UI. However, the phallic measurement requirement of high follower count starts to gain new dimensions when we propose showing off our shiny new profile to outsiders.
For those used to the follower counts of other social networks the 111 my profile is, at time of writing, a rounding error. Not that the 940-ish Twitter followers I've accreted is a beacon of relevance either, but the eastern-European porn bots that have discovered my account through their data mining at least helps me seem mediocre.
My Spiceworks profile: I'm kind of (not) a big deal (at all) (click to enlarge)
To put things in context the most influential individual within the Spiceworks community – Scott Allan Miller or SAM – has only 3778 followers at the time of writing. The next most influential – John White – has a mere 470. Phillip Lessley, a prolific poster and easily within the top 5% of the community, has 238 followers.
The community is there: 4.5 million Spiceworks users, a significant percentage of which actively use the forums. There is a potential addressable market of 13 million IT pros and an untold number of VARs, MSPs, CSPs and vendors looking to create pages.
For all that there is this massive audience, driving interconnection and facilitating discoverability will require massive user experience overhauls on the existing community website. And don't get me started on the mobile app.
Target acquired
All of this is fixable. Spiceworks has done something unique; it has captured an industry vertical in a social network and begun, piece-by-piece, to exploit it. Spiceworks estimates – based on some intensive polling and surveying – that its userbase is responsible for over $500 billion in annual IT spending. This leads to a lot of advertising money being spent by vendors chasing that pot of gold resulting in substantial revenue for Spiceworks and a chance to actually IPO in the green.
To be clear: Spiceworks is a threat to every existing social network, tech marketing agency, content creation firm and PR apparatus on the planet. If left alone for only a few more years they will own the relationships between most IT pros and their vendors as well as between many of those vendors themselves.
I could rotate through a list of vendors, but suffice it to say that I think Dell needs to seriously look at an acquisition. Dell has ambitions of ditching the fairly low margin "shifter of tat" business and move on to become a services company. With the exception of some of the higher-end enterprise gear, it just doesn't make sense for Dell to keep making its own stuff.
If it doesn't make its own stuff it will need strong alliances with other vendors - a difficult proposition given the long history of competition between Dell and current box makers. It will also need an ecosystem of partnerships to provide services to it's customers, both are the type of B2B corporate networking that Spiceworks specialises in.
Spiceworks is an ideas factory; what Silicon Valley is to the development of new software, the Spiceworks community is becoming to the provisioning of IT services. A Dell/Spiceworks hybrid might not get along so well with the other major verticals - HP, Cisco, IBM, Oracle - but that's a fairly minor price to pay for what Dell would gain.
Spiceworks is in the same metro as Dell. Everyone knows everyone else and Dell is looking to become a vertically integrated company that dominates the IT sector. They can't do that without something that makes them unique. Spiceworks could be that something.
Unlike most social networks, Spiceworks has the very real possibility of an IPO with a business model that works and being profitable out of the gate.
If the tech giants let Spiceworks IPO, they'll regret it. They clearly missed the boat with Facebook, and it cost them a significant opportunity, however, whereas Facebook is a million kilometers wide, it is only a few centimeters deep. Google built an empire on advertising money. Microsoft threw one away trying to replicate that success. Everyone seems to want a piece of this particular cash cow.
Once Spiceworks becomes established within a given profession, its focus on depth in its social networking and deep vertical integration will make them far harder to dislodge or effectively compete against. The IT industry is just the beta test and Spiceworks doesn't have to be all things to all people to suck the majority of money out of the advertising market. It just has to target the high-value "professional" markets, one at a time.
Strike! Now, while the iron is hot
Now is the moment of Spiceworks’ vulnerability. The firm has revealed application and social network plays to the world but have yet to fully realise the execution of either. The next 18 months will out. If Spiceworks is left alone and they succeed in their various goals then I'll be telling the next generation "I knew them back when" stories.
Alternately Spiceworks could get acquired, or it could drop the ball in spectacular fashion, miss the window of opportunity and fade into nothingness. Of course, how this plays out will seem nebulous at best if the most you know of Spiceworks is reading about the company here on The Register a few times, or perhaps you have simplydownloaded the application and tried it out.
But the folks in charge of Spiceworks are aware that they stand on a precipice, and they understand the delicate balance between cooperation and competition with partners, customers and the product they sell: you and your precious eyeballs.
Spicerex prepares his victory roar
Spiceworks' CEO Scott Abel is a serial entrepreneur, but this is more than "just another company" to him; it's something of a legacy. Every man has his price, but his will be high.
These are not people who seem likely to fumble. They are dedicated, but experienced; they know the risks of working too close to the red line. They are aware of the importance of maintaining a productive, innovative and inviting corporate culture and they put serious amounts of effort into ensuring that they don't lose what has gotten them so far.
The next 18 months – two years at the most – will tell the tale. With 43 per cent of their user base now consisting of organisations above 500 seats, expect them to become as common a name in the IT industry as Facebook or Twitter are to the world at large. Despite the hurdles to be overcome, I am convinced that Spiceworks is here to stay. ®