Tangoe Acquires MOBI – Part II: Why?

Note: if you missed Part I of this blog series, catch up and read Part I: Context for the Acquisition

This is part of a four-blog series exploring Tangoe’s acquisition of MOBI.
Part I: Context for the Acquisition
Part II: Why?
Part III: Enterprise Considerations
Part IV: Market Considerations and Conclusion

Industries: Enterprise Mobility Management, Technology Expense Management

Key Stakeholders: CIO, CFO, Chief Digital Officer, Chief Technology Officer, Chief Mobility Officer, Mobility Directors and Managers, Procurement Directors and Managers, Accounting Directors and Managers

Why It Matters: Tangoe is the largest technology expense management vendor. By purchasing MOBI, Tangoe gains Managed Mobility expertise, a customer base with high customer satisfaction, and expertise in Robotic Process Automation to support enterprise mobility.

Top Takeaway: Tangoe continues to aggressively acquire market leaders both to increase market share and add Best-in-Breed capabilities, personnel, and technology to its technology management portfolio.

Tangoe Acquires MOBI

On December 5th, 2018, Tangoe announced the acquisition of MOBI, a leading managed mobility services organization based in Indianapolis, Indiana in the United States. With this acquisition, Tangoe increases its IT spend under management to over $40 billion, increasing its lead over other spend management vendors with multiple billions of dollars of enterprise technology under management including Flexera, Snow Software, Microsoft Azure Cost Management, CloudHealth by VMware, Calero, MDSL, Cass Information Systems, and Sakon.

So, Why Did Tangoe Purchase MOBI?

MOBI’s ability to scale as a managed mobility services company and to maintain high levels of customer satisfaction and retention made it an attractive acquisition target.

To understand why, consider that in the startup world, Amalgam Insights notes that companies tend to have new management challenges each time that they expand by 3x. So, for instance, a company that has 30 employees will need to change its management policies to support a 100 employee company, and then again to become a 300 employee company. The experience in managing a company at larger scale is indicative of the ability that the company’s policies will be scalable. So, for instance, customer service policies that have proven to be stable for a 250-300 person company would tend to be easier to maintain than those that exist for a 10-15 person company that may have significant hands-on management that can make up for a lack of policy.

Amalgam Insights believes that this success at scale was an important aspect of Tangoe’s acquisition of MOBI. Tangoe, as a roughly 2,000 employee company, needed to acquire a company of scale to increase its managed mobility capabilities and to bring in a team of strong customer service and managed mobility professionals who already understood the demands of enterprise IT. With MOBI, Tangoe was able to bring in a top vendor to drive Tangoe’s expansion of managed mobility services and know that the policies in place would work for both a large number of employees and clients.

Tangoe also acquired MOBI’s significant investments both in their platform as well as in robotic process automation. At MOBI Untethered 2017, MOBI introduced their Mobots, a series of robotic process automation tools used to support service desk, service orders, carrier logistics, and billing data use cases. Amalgam Insights believes that these “Mobots” will end up being a significant advantage in scaling service reach, automating carrier interactions, and accelerating answers for support requests.

With this acquisition, Indianapolis now becomes the center of Tangoe’s Managed Mobility Services efforts. Although Tangoe has a significant facility in Austin, Amalgam Insights expects that increased growth in Tangoe Managed Mobility Services will lead to investment in Indianapolis. This is important both because Indianapolis is a growing tech hub in the United States and because MOBI had already negotiated tax incentives in return for job growth. As Tangoe’s Managed Mobility Services increase in size over the next few years, this benefit could be a true win-win for both Tangoe and Indianapolis.

MOBI’s experience in device logistics will be valuable to Tangoe both in providing additional capacity to manage mobile devices as well as to support Tangoe’s existing managed mobility team which is largely located in Austin, Texas. In December of 2016, Tangoe had announced a significant expansion of its Austin facilities to support device refreshes, repairs, and customization. With this additional investment in device logistics, Tangoe increases its throughput for handling large enterprise mobility projects.

One aspect of this acquisition that may help MOBI going forward is that Amalgam Insights notes that MOBI has lost deals in the past due to their inability to support landline and network environments. However, as a part of Tangoe, MOBI no longer has this problem as Tangoe’s Managed Mobility Services arm. Tangoe’s long-term DNA is based on telecom and network expense management and the breadth of Tangoe’s enterprise deployments will provide expertise and support for all enterprise technologies that are peripheral or related to enterprise mobility.

Amalgam Insights also notes that MOBI was also taking on the challenge of going down-market in conjunction with its automation efforts. With the Tangoe acquisition, Amalgam Insights expects that the ongoing service development efforts of the Tangoe Managed Mobility Services team led by the MOBI team will focus more on the complexity of enterprise mobility efforts, a challenge well-suited to MOBI’s automation and service capabilities.

In Part III of this blog series, we will explore enterprise considerations for Tangoe and MOBI’s current and potential customers. Or, to read the entire report and acquire inquiry time with the analyst to better understand this acquisition from your organization’s perspective, purchase the report at the following link: https://www.amalgaminsights.com/product/amalgam-insights-market-milestone-tangoe-acquires-mobi-to-enhance-mobility-management-capabilities/

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