On March 24th, 2021, enterprise architecture management company LeanIX announced the acquisition of Software as a Service (SaaS) management company Cleanshelf. This acquisition brings together two pioneers in their respective markets and brings together the combination of two large themes in IT: the increasing consumerization of IT that allows end-users to pick and combine their tools easily conflicts with the enterprise need to productize and manage IT so that technology investments are aligned with revenue.
About Cleanshelf, the Acquired Company
Cleanshelf was founded in 2017 as one of the first vendors focused on the business challenges of managing SaaS. Cleanshelf is based in San Francisco with subsidiaries in Denver and Ljublijana, Slovenia. The company had previously raised an $8 million A round in March of 2020 lead by Dawn Capital with participation from LAUNCHub Ventures.
Cleanshelf manages over $700 million in spend under management, has over 3,000 integrations with SaaS applications, and uses its operational data both for license optimization and to audit access and security issues. With this acquisition, Cleanshelf will continue as a standalone product, but will be renamed “LeanIX SaaS Intelligence” as of May 1st, 2021. SaaS discovery and cataloging functionality is scheduled to be provided as a complimentary component of the LeanIX Application Portfolio Management module in Q2 2021.
About the buyer, LeanIX
LeanIX was founded in 2012 to help businesses with continuous digital transformation and is headquartered in Bonn. LeanIX is an enterprise architecture management company with a focus on ease of use, providing business context to enterprise architects, controlling cloud environments and providing alignment between IT and product-based technology use cases. LeanIX has raised over $120 million, including an $80 million D round in July 2020 led by Goldman Sachs Growth, and has been noted as a market leader or leading solution by a variety of analyst firms and review sites.
Currently, LeanIX’s platform consists of:
- Enterprise Architecture Suite consisting of Application Portfolio Management, Technology Risk Management, and Business Transformation Management modules
- Cloud Intelligence module supporting cloud services across AWS, Azure and GCP and spend showback for cloud architects and managers
- A newly announced Microservice Intelligence capability providing cataloguing and discovery capabilities for all microservices in an organization and to help DevOps teams manage complex microservices environments
- And, with the acquisition of Cleanshelf, a SaaS Management solution to provide discovery, catalog, cost and user metrics, and renewal management
Why This Acquisition Matters for Managing Massively Distributed IT
Foundationally, Amalgam Insights believes this acquisition is important because it provides IT departments with an opportunity to manage their growth portfolio of microservices, SaaS, and public cloud resources through a single vendor. Although the public cloud, multi-cloud support, and microservices have been used over the past decade to build and support massively scalable products and businesses, the management of these technologies has been widely distributed, siloed, and often dependent on the manual tracking conducted by individual architects, analysts, and developers within IT.
This challenge has become increasingly difficult to manage as the granularity of microservices, the wide variety of SaaS vendors, and the ever-expanding breadth of public cloud services have led to a complex and ever-changing set of catalogs and spend management. And, frankly, IT managers lack the time and expertise to be the accountants and service trackers that these services increasingly deserve as they have become million-dollar line items in corporate budgets.
Amalgam Insights notes that LeanIX is differentiated based on its ease of use and implementation, which are especially important traits for managing the more “agile,” decentralized, and end-user-oriented aspects of IT and technology such as software and microservices. LeanIX’s approach aligns technology to externally facing products and services is also a valuable approach for understanding why technology is being used within an organization. With the addition of Cleanshelf, LeanIX will be better positioned to provide granular management capabilities at the end-user level to help managers handle their technology portfolio within the umbrella of the broader governance of enterprise efforts.
Recommendations for the IT Community
In light of this acquisition, Amalgam Insights provides the following recommendations for the IT and enterprise technology communities.
Amalgam Insights recommends that companies develop both a strategy and a toolkit portfolio to manage a new generation of technologies across all areas of cloud (infrastructure, platform, and applications) that are accessible and can be sprawling in nature. Remember the trend of Bring Your Own Device, which wreaked havoc on IT asset management, governance, compliance, and security efforts? With the evolution of public cloud, Software as a Service, and microservices, the “Bring Your Own” IT trend has grown to encompass practically all data, services, and digital processes that an employee may use. In short, employees are increasingly able to do the majority of their work outside of enterprise-approved tools if organizations fail to effectively govern and track vital IT services. Now we are in an era of “Bring Your Own IT” as well as an era of “digital transformation” that is driving the paperless office and rapid automation.
Amalgam Insights also recommends that businesses treat “IT-business alignment” as a mandatory task rather than simply providing lip service to the phrase and treating it as a fluffy MBA buzzword. To do so, companies must align technology to a value chain that is associated with a key performance indicator or business objective. This allows companies to both gain a better sense of the true Total Cost of Ownership associated with business transactions as well as the lineage and governance needed to detect whether there are opportunities for maintaining a more optimized technology environment. There may be opportunities to consolidate multiple products conducting the same task or to bring in new technologies that can bridge opaque or error-prone process steps.
Finally, Amalgam Insights recommends that companies look specifically at managing the applications, APIs, and microservices that employees and customers are accessing. It is easy to assume that just because a SaaS app or a cloud-based microservice does not require internal resources, that it does not need to be managed. But this approach will lead to a financially unsound approach where the IT Rule of 30 will come into play, which states that any unmanaged technology category will accumulate 30% in waste over time.