Spiceworks Picks Up $25M to Build Facebook for IT

Ted Nitka, Spiceworks, Structure Big Data 2011

Ted Nitka of Spiceworks speaking at Structure Big Data 2011

Spiceworks, an Austin, Texas-based startup, has raised a $25 million fourth round of funding from Adams Capital Street Partners and Tenaya Capital. The company, which I’ve followed since it was founded in 2006, has raised more than $41 $54 million to help it build a community of IT professionals who use the software to monitor their companies’ networks. Spiceworks hit on a great model for its business by realizing it could offer IT monitoring software for free in exchange for letting vendors sell directly into the SMB information technology market.

Now it will face a challenge as IT shifts to the cloud, where Spiceworks’ software can’t help them track their assets. However, it seems aware of the shift, and the community aspect of the site that has built up over the last five years should help it transition to a more-diverged IT world. The company also is aware of the threat, or was last year when I interviewed CEO Scott Abel about Spiceworks, its plans and the encroaching threat of the cloud on its business model after it raised a $16 million round.

The company used the $16 million round to build out more features and make the network more social, and this round appears to be aimed at putting Spiceworks right in the middle of the social-buying frenzy with references to building out a Groupon-like group buying model for Spiceworks members. I have to admit I admire this company for finding a way to serve both its advertisers and its core community without alienating either. Some of the consumer-oriented social sites should take note.

Below is the video I did with Abel last year: