Spiceworks is now selling ink, and it’s a potential license to print money. The IT management tools vendor and alternative media company is launching a shopping cart function through its dashboard, enabling its 1.6 million end users to buy IT products and services. The first item on the menu: printer ink.
The Austin-based company is looking to tap into one of the most lucrative and steady revenue streams in the IT business. Its users own and manage nearly 11 million printers, which require regular supplies and maintenance, making this venture potentially lucrative. It’s partnering with Hewlett-Packard on the launch and looks to add more printer ventures as the program matures.
The shopping cart and ink resale program is the latest step in Spiceworks long transformation process. Founded in 2006, Spiceworks made a name for itself as media company whose content is free IT management tools for small businesses. It added forums and social media channels, giving users the ability to communicate and help solve problems. And it’s developed a strong following and user base in the managed services channel.
The ambition, though, lies in facilitation of procurement. Spiceworks’ tools are IT management, giving users easy and free wares for monitoring servers, applications and services. By adding sales features, Spiceworks is making it easier for users to resolve problems and acquire products they need for sustained and quality operations.
“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,” said CEO Scott Able. “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 shopping cart function is the second product launched by Spiceworks to make purchasing easier. Earlier this year, Spiceworks launched its Request for Quote service. This enables Spiceworks users to manage their suppliers and seek new product sources through an automated quoting tool. Spiceworks reports strong adoption and steady increase in the tool’s use.
Starting with printer ink makes perfect sense. Printer consumables are something needed by every business, and managing consumables is laborious. By inserting itself in the printer monitoring and consumable management process, Spiceworks is making itself more valuable to users. Rather than having to use multiple consoles to manage performance and purchasing, users can accomplish everything through a single Spiceworks interface.
And that’s the target Spiceworks is aiming for – simplified purchasing. Through the shopping cart, Spiceworks for the first time is actually handling the transaction. In existing reseller relationships for hosted services through Rackspace and cloud email with Google, the relationship has been a pass-through. The shopping cart simplifies that for the user. The user pays Spiceworks. Spiceworks pays the vendor. The vendor ships to the end user.
Eventually, the Request for Quote and the shopping cart could merge, giving Spiceworks users the ability to do better, automated competitive procurements. Add the ability of users to leverage the experience of peers through the social forums and satisfaction ratings, and Spiceworks becomes an influencer and facilitator of product adoption.
Spiceworks isn’t looking to abandon its media model. Jay Hallberg, co-founder and vice president of marketing, believes the shopping cart feature and the analytics derived from the monitoring tools will enable its vendors to use Spiceworks for more effective marketing campaigns.
The printer sales program Spiceworks is starting with is interesting since it has many of the characteristics of managed print services, a model that printer vendors haven’t been able to make work in the channel. The Spiceworks’ experience with ink has the potential of acting as a catalyst for the managed print market by proving the model to skeptical solution providers.
Vendors are looking for alternative channels to reach new markets and facilitate more efficient sales. Spiceworks is headed into this alternative channel by providing access to a large pool of buyers, intelligence for targeted marketing, and mechanisms to facilitate immediate and repeat sales. Spiceworks could be representative of the next generation channel.
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Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at [email protected].
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