Spiceworks Bets $25 Million On IT Product Sourcing

Spiceworks, the free remote management and help desk tool for VARs and MSPs, is pushing deeper into new markets. Indeed, Spiceworks has raised $25 million in series D funding to help SMB channel partners and users more easily purchase IT products online. In some ways, I think Spiceworks may potentially compete with Autotask's VARStreet and CNet's Channel Online. Here's why.

According to a prepared Spiceworks statement:

"In addition to helping IT professionals manage their networks, Spiceworks allows them to create purchase lists, renew warranties, and buy cloud services from select vendors. Over the next year, the company will deliver more social commerce capabilities, such as group purchasing and deals, integrated request for quote with the leading technology vendors, and the purchasing of IT products and services built directly into the workflow of the application."
In some ways, it sounds like Spiceworks is trying to leapfrog established product sourcing tools like VARStreet and Channel Online, which help VARs and MSPs to gather price quotes from a range of vendors while potentially speeding channel sales cycles.

Still, I need to keep Spiceworks' strategy in perspective: The company's free, advertising-based remote monitoring tool apparently has 1.4 million users. However, a range of paid RMM tools continue to see growing installed bases. I suspect the trend will be the same in the product sourcing market, with multiple competitors continuing to grow.

Meanwhile, Spiceworks prefers to compare itself to Groupon and FaceBook. “What Groupon and Facebook are doing for commerce in the consumer market, Spiceworks is doing for IT buying in the business market,” said Jeff Diehl, partner of Adams Street Partners, an investor quoted in the Spiceworks funding announcement.

Heck, anybody would like to be compared to Groupon (valuation: $25 billion) and FaceBook (valuation: $78.75 billion). Still, Spiceworks' investors have to be careful when making such lofty statements. They're difficult to live up to.

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TAGS: RMM Help Desk
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