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Spiceworks: Economics & Security of Ad-Supported SMB Applications

written by: •edited by: Bill Bunter•updated: 5/5/2010

Part II of our interview with Jay Hallberg, co-founder and VP of marketing of Spiceworks

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    No Free Lunch?

    Bright Hub: Are the economic conditions making this easier for users to accept?

    Jay Hallberg: We haven’t really seen a noticeable change in thinking about the ad- supported model because of the economy. Keep in mind we were adding over 1,000 new businesses per day before the September and we're still adding over 1,000 new business per day. Free has always been in fashion and people will choose free products in good times and bad times.

    BH: There is a common perception that you get what you pay for, so how are you trying to change this view? There is no free lunch, but IT can be free?

    JH: Unfortunately, that's not necessarily true in the technology world. IT departments around the world are filled with $1,000 or even $1,000,000 shelfware -- software that never worked as promised... if at all! Before we even wrote one line of code for Spiceworks, we interviewed dozens of small businesses all around the country. We were surprised to learn how many of them had spent thousands of dollars to buy traditional IT management software but gave up on trying to deploy it because it was too complex and difficult to use.

    No IT pro wants to go to his boss at an SMB and say, “I need to spend $1,000 this year to buy software to keep track of how many PCs we have and what software is installed on them.” Why not spend that money on hardware, software and services to grow their business instead?

    Ironically, by giving away software for free we HAVE to make it better. Our business model relies on usage. If it's not usable we don't generate money. Therefore, we're constantly improving the usability and features in our product just like Google keeps investing in their core search technology. It's an approach that resonates with a lot of people.

    BH: Security is something that seems to be a concern, so how can I trust a product when it has an ad running? Given the amount of adware out there, how do I know that the ad on my application isn't filled with adware for example?

    JH: We've built a lot of trust with our 500,000 users over the past two years. Our advertisers are trusted technology brands like Microsoft, HP and Rackspace. We review all the ads. Our users comment on ads and occasionally they'll have us contact the advertiser to change the copy or even the images if they don't like it. That's something you rarely see other places. 500,000 users looking out for each other builds a lot of trust!

The Spice(works) of Life

Spiceworks VP of Marketing and co-founder Jay Hallberg talks about the future of ad-supported applications.
  1. Spiceworks: Ad-Supported SMB Applications
  2. Spiceworks: Economics & Security of Ad-Supported SMB Applications
  3. Spiceworks: Concerns of Ad-Supported SMB Applications