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

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.

New Study and Podcast:
Achieving Enterprise Software Success

A recent survey of software buyers and sellers investigated perspectives on what constitutes a successful enterprise software deployment. The study, conducted by SandHill.com and Neochange, generated some eye-opening findings about the various measures of software success, the drivers of success, and software buyers expectations' of their vendors in terms of helping them achieve success. Based on the findings, the author's developed a list of best practices aimed at improving the success of today's enterprise software deployments.

To learn more from the study, listen to a new podcast with the study's authors, SandHill.com's M.R. Rangaswami and Neochange's Chris Dowse as they discuss the findings and implications of the research. Or to review the survey findings in detail, download a complimentary copy of the full report, “Achieving Enterprise Software Success.”

Is Your Company Too Arrogant?

A brash, aggressive personality matches the actions of many software companies – but is it right for your company? Harry Max of Rubicon Consulting says few vendors can pull off the accomplishments and market domination needed to succeed with an arrogant image. Read whether your company is getting too full of itself in this post to the SandHill.com blog on software marketing.

Publish Your Perspective!

SandHill.com wants your opinions. Send your thoughts on the enterprise software industry to SandHill.com editor, Maryann Jones Thompson (maryann@sandhill.com) and have your opinions published on our site.

DON'T MISS: CEOs on Strategy and Social Issues

Business leaders are now more inclined to incorporate society's expectations into their core strategies but face many challenges when they do. Read the latest thinking on corporate social responsibility in this article from The McKinsey Quarterly.

News Update: Changing the Pace

A new target for Microsoft, a Google slap in the face, a $100 million carrot and a fedora model. Read these stories and more software news of the week in the latest SandHill.com Software News Summary.

Poll: Future of Ad-Supported Software?

Will the ad-supported software model take hold in the software industry?
Take our Pulse Poll >>

Last week, readers forecasted the impact of the economic downturn on marketing in the software business.
Give us your opinion and see the results >>

More at SandHill.com:

Logitech chairman pooh-poohs Microsoft bid.
Read the most important enterprise software industry news of the week >>

Healthcare platform provider, TriHealix received $7 million.
Monitor the latest software venture capital deals >>

Microsoft bought the technology of U-Prove.
Size up last week's software M&A deals >>

Yahoo named Rajeev Rastogi as VP & Head of the new lab in Bangalore, India.
See who's made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the SandHill.com site.

Parting Thought

“In a start-up company, you basically throw out all assumptions every three weeks.”
–Scott McNealy

Courtesy of Malcolm Kusher, The Kushner Group

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SandHill.com is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.