Winning with an Ad-Supported Model
The consumerization of the enterprise means software vendors can succeed with networked offerings focused on key markets. Here's how.
By Scott Abel and Jay Hallberg, Spiceworks
Mar. 10, 2008
In the past, enterprise software companies have thrived with a variety of business models. We should know: We've worked for a lot of them.
So when we set out to develop a software product that would be supported by an advertising revenue model, several experts urged caution. However, we believed that the "consumerization of the enterprise" - corporate adoption of consumer-like services and business models - would accelerate during this decade and that it would start with small businesses.
Fast forward two years: Our product, the Spiceworks IT Desktop, has evolved to become what we call the "iTunes of IT" with a user base of 250,000, and we've added 50,000 new users in the past two months alone. But the secret to succeeding with a free ad-supported software business has to do with far more than just advertising.
Evolution of the Ad-Supported Model
Enterprise software companies have long struggled to crack the small and mid-sized business (SMB) market. The potential in this market is huge but the traditional enterprise business model simply could not scale down to work effectively in this market. Most of these vendors tried to take their enterprise sales, product and service models and push it down to the SMB market - all with limited success.
Today, new software companies are leveraging software-as-a-service (SaaS), open source and other new technologies and business models to properly address the needs of the SMB market. The free, ad-supported model presents a new way to deliver the right solutions to this massive market.
Our company, Spiceworks, is a pioneer of free ad-supported software for business applications. We develop IT management software designed specifically for SMB technology managers.
Our focus is utility. We wanted to create a product that was powerful, yet simple. It had to be easy to learn and easy to use. And most importantly, our users had to want to use it every day. The result is that we continually hone the application to keep it focused on the needs of our unique market - and that sometimes means taking functionality out of the product.
-
So when we set out to develop a software product that would be supported by an advertising revenue model, several experts urged caution. However, we believed that the "consumerization of the enterprise" - corporate adoption of consumer-like services and business models - would accelerate during this decade and that it would start with small businesses.
Fast forward two years: Our product, the Spiceworks IT Desktop, has evolved to become what we call the "iTunes of IT" with a user base of 250,000, and we've added 50,000 new users in the past two months alone. But the secret to succeeding with a free ad-supported software business has to do with far more than just advertising.
Evolution of the Ad-Supported Model
Enterprise software companies have long struggled to crack the small and mid-sized business (SMB) market. The potential in this market is huge but the traditional enterprise business model simply could not scale down to work effectively in this market. Most of these vendors tried to take their enterprise sales, product and service models and push it down to the SMB market - all with limited success.
Today, new software companies are leveraging software-as-a-service (SaaS), open source and other new technologies and business models to properly address the needs of the SMB market. The free, ad-supported model presents a new way to deliver the right solutions to this massive market.
Our company, Spiceworks, is a pioneer of free ad-supported software for business applications. We develop IT management software designed specifically for SMB technology managers.
Our focus is utility. We wanted to create a product that was powerful, yet simple. It had to be easy to learn and easy to use. And most importantly, our users had to want to use it every day. The result is that we continually hone the application to keep it focused on the needs of our unique market - and that sometimes means taking functionality out of the product.
-
