Month: May 2021

Key Stakeholders: Chief Information Officers, Chief Technology Officers, Vice President/Director/Manager of Platform Engineering, Vice President/Director/Manager of Operations, System Architects, Product Managers, Product Marketing Managers, IT Finance, Software Asset Managers, Sales Operations, Marketing Operations

Why It Matters: As Software as a Service continues to balloon into a $275 billion global market by 2025 and the typical Global 5000 enterprise supports over 1,000 apps over its network, the challenge of SaaS configuration increasingly is linked to employee onboarding and productivity. Just as the battle for enterprise mobility security was a core concern for the 2010s, the battle for SaaS app governance will be a core IT concern for the 2020s.

Key Takeaway: IT departments must coordinate enterprise architects, security and governance teams, and software asset management personnel to ensure that all major SaaS applications considered mission-critical have well-governed configuration testing and management capabilities.

About the Funding Round

On May 19, 2021, application configuration platform Salto announced a $42 million B round led by Accel with participation by Salesforce Ventures and prior investors Lightspeed Venture Partners and Bessemer Venture Partners. This round comes only seven months after a $27 million A round announced in October 2020.

With this round of funding, Salto is expected to continue developing its solution and rapidly hiring. Salto currently supports Salesforce, NetSuite, HubSpot, Workato, and Zuora. These core SaaS applications are all market leaders, but considering the breadth of additional enterprise applications currently in market, the potential value associated with Salto supporting additional solutions is obvious and massive.

What Does Salto Do and Why Is It Worth So Much?

Salto is a solution for configuring business applications in a repeatable, scalable, and governed fashion at a time when the administration of Software as a Service is becoming increasingly complicated and challenging. Salto uses DevOps-based and software development-based tools and methodologies to help enterprise support SaaS at scale.

This mindset comes from Salto’s founders, Rami Tamir, Benny Shnaider, and Gil Hoffer, who collectively founded Salto in 2019 after previously working at Pentacom, Quumranet, and Ravello. Each company ended up exiting for over $100 million, showing the type of track record that venture capital firms love to see.

Salto’s core technology is maintained as an Open Source project (https://github.com/salto-io/salto) and a SaaS toolkit that includes

• Not Another Configuration Language (NaCl… get it?), a structured language to help support and define software configurations
• A command-line interface with operations commands including
  Fetch, which connects to each enterprise application and downloads current configurations for users
• Deploy, which compare your preferred configurations to existing configurations and then creates an execution plan to fix configurations
• A Salto vs-code extension to the vs-code IDE used to interact with NaCl-based files.

The SaaS offering of Salto also supports

• Environments that allow for testing a service instance of an application and can be managed through the Fetch and Deploy applications
• A Git client, which helps users to effectively push or pull changes as needed to support software configuration.

So, why does this matter so much for IT?

Let’s take a step back. We have established that software is one of the greatest force multipliers for human effort in the history of the world. It is nearly impossible to get work done in large enterprises without using at least one or more complex enterprise software solutions, such as an ERP (Enterprise Resource Planning) or CRM (Customer Relationship Management) system.

To add to this complexity, the dominant deployment mode for software is now Software as a Service, which is growing over 25% per year and drives the majority of new software purchases. Amalgam Insights estimates that the average company with 1000 employees is running 500 applications on their network and about 10% of those apps are centrally managed through IT as key enterprise data assets and workflow managers. These SaaS applications are being updated constantly, to the point that many vendors have given up on providing formal versions and instead simply provide agile updates. Even vendors with formal versions are releasing new functionalities and fixes on a constant basis.

In this era of immense application environments and constant change, companies can easily end up with inconsistent environments across departments and locations as they customize their software deployments with user interface preferences and specific code to match their business needs. Companies need to support their software suites based on business dependencies and make sure that core software solutions are always working for the sake of employee productivity.

Amalgam Insights believes that Salto’s SaaS configuration solution is an important management solution for end-user computing that has not been fully developed as of yet. At a time when everything from paper to on-premises software to hardware is all being replaced by SaaS, companies have either been offered SaaS operations management solutions to govern and secure licenses, Software asset management to manage the inventory of applications, or SaaS expense management to reduce and optimize spend. However, these three families of SaaS management do not effectively govern and audit the configuration and administration of applications

Salto uses NaCl to extract the metadata associated with a software configuration to provide users with a consistent taxonomy, text search, and references to make sure that companies understand what happens when they change their software configurations. Seemingly minor access or usability changes may end up unwittingly breaking business processes and interdepartmental collaboration.

The Value Chain of Salto for Enterprise Environments

The practical result is that Salto has seen customers claim to accelerate update times by 75%. The resulting productivity can be framed in several ways.

First, the terms of the (value of the new solution) * (the number of employees affected). This value should be based on a value based on the average revenue per employee, as employee output is based on revenue, not compensation.

Second, the avoidance of technical debt and avoiding the conflicts of multiple versions or broken versions in production can be estimated.

Third, the value of having visibility to the full configuration and interrelationships that each software system has can lead to better business process management and accelerated business changes. This value may be more difficult to quantify, but is often noticed at the executive level when businesses are trying to make changes.

Fourth, this level of visibility and auditability can lead to more rapid governance and compliance reporting as well as improved protection to potential security vulnerabilities related both to application configuration and the human aspects associated with working on misconfigured applications.

—
Altogether, the value of Salto quickly adds up to 1% of an employee’s annual productivity, which Amalgam Insights estimates to be between $3,200 per year.

Hyoun Park, Chief Analyst Amalgam Insights

—

It is not unreasonable to think that an employee could quickly lose an hour or two each month from NetSuite or Salesforce configuration issues, either from direct work issues or from the lineage, reporting, and security issues that follow. At the enterprise level, this quickly escalates to over $3 million for every 1,000 employees, making the business case for Salto more obvious.

This is ultimately the case that Salto is making in a SaaS-empowered world and that Accel, Bessemer, Lightspeed, and Salesforce Ventures have signed off nearly $70 million to pursue.

Recommendation for Enterprise IT Departments

Amalgam Insights’ key recommendation in light of this announcement is simple: Work with enterprise architects to ensure that all major SaaS applications considered mission-critical have well-governed configuration testing and management capabilities. 

Enterprise SaaS is currently a $110 billion market that will grow to $275 billion in 2025. In light of this growth and the increasing corporate dependence on SaaS to support business processes, companies must have a solution to support effective SaaS configuration management and changes. In this world of ever-changing technical needs, IT must keep up and ensure that SaaS deployments and updates are governed just as more traditional software, hardware, network, data center, and other IT resources are.

Amalgam Insights is relaunching its weekly summary of important announcements in the data and analytics space. If you would like your announcement to be included in these roundups, please email lynne@amalgaminsights.com.

Product Launches and Updates

DataRobot Delivers New Platform Enhancements

At their AI Experience Worldwide event this week, DataRobot announced a number of enhancements to its enterprise AI platform, with the goal of making it easier for every user to have AI be useful for them.

* Composable ML will allow advanced AutoML users with the requisite coding background to tweak existing DataRobot “blueprints” for their specific use cases.
* Continuous AI extends DataRobot’s MLOps product by letting users schedule relevant retraining sessions for models in production. These events can be scheduled on a regular basis, or when specific events occur such as data drift. In addition, new challenger models can be automatically created with AutoML to ensure the model that best fits the data is the one in production.
* The No Code AI App Builder will allow any user to turn a model into an application without needing to code, letting business users and decision makers leverage their model’s predictions in a more timely manner.
* Bias and Fairness Production Monitoring enables bias testing and monitoring of production models, warning when bias is detected and what factors are responsible.
* Model Grader will score existing models on four vectors: data quality, model robustness, model accuracy, and model fairness. At a glance, customers will be able to understand how their models perform with these criteria in mind.

In addition, DataRobot also partnered with Hivecell to deploy AI in edge computing environments, launched an AI for Health Incubator, and joined a World Economic Forum initiative to address ethics in artificial intelligence.

IBM Announces New Hybrid Cloud and AI Capabilities

During this week’s Think event, IBM announced new capabilities to bring data and AI together.

* IBM debuted AutoSQL, a new capability within IBM Cloud Pak for Data. Customers will be able to automate access to their data, even across hybrid and multi-cloud environments, without having to move or copy said data. This will speed up the use of said data while mitigating the risks of creating further data silos that occur when data is moved.
* IBM launched Watson Orchestrate, an interactive AI that will assist users in performing “tasks” from procuring approvals to preparing proposals more quickly in order to focus on more strategic tasks. Watson Orchestrate is currently available in preview as part of the IBM Automation Cloud Paks.

Altair One Cloud Platform Debuts New Features and Functionality

On Monday, May 10, Altair launched Altair One, a portal for the Altair product suite, including access to Altair’s data analytics and management tools and its high-performance computing (HPC) capabilities. By integrating its AI and analytics tools with its base of computer-aided engineering and design tools into a single suite, Altair One can provide value for organizations whose use cases have combined needs for HPC and AI together.

Acquisitions

DataRobot Acquires Zepl to Enhance Enterprise AI Platform Capabilities for Advanced Data Scientists

In addition to the updates to its platform noted above, on Tuesday, May 11, DataRobot announced that it had also acquired Zepl, a cloud data science and analytics platform. Zepl will be incorporated into the DataRobot platform in its notebook form, allowing more advanced data scientists to code their own tasks and models manually within DataRobot, and collaborate with business analysts in one place to extend their initial model-building efforts.

New Hires

Alteryx Appoints Paula Hansen as Chief Revenue Officer

Monday, May 14, Alteryx appointed Paula Hansen as their Chief Revenue Officer. Hansen has held the CRO position before at SAP Customer Experience, and before that served as Vice President of Cisco’s Global Enterprise organization. Hansen brings broad enterprise solutions sales capabilities to this position that are in line with Alteryx’ plans for future growth as a foundational platform for supporting analytics and AI.

General

U.S. Senate Committee on Commerce, Science, and Transportation Approves Technology Research Bill

On Wednesday, May 12, the U.S. Senate Committee on Commerce, Science, and Transportation approved the Endless Frontier Act (S.1260), a $110 billion bill to promote technology research over the next five years. Among the key technology areas included were artificial intelligence, quantum computing, biotechnology, and energy. Amalgam Insights believes that this bill will fundamentally affect the product development maps of AI, cybersecurity, and quantum computing vendors and provide standards that will be incorporated into RfPs and other software sourcing exercises.

On May 10, 2021, vCom Solutions announced general availability for their IT Lifecycle Management Solution vManager 13.1. This is the first version of vCom that includes cloud FinOps support for Amazon Web Services, Microsoft Azure, and Google Cloud Platform.

This version also includes vManager Marketplace, which allows vCom customers to do comparative purchases of IT services based on real-time pricing across hundreds of network, mobility, and collaboration vendors, “Pay Now” functionality that allows vCom customers’ accounting teams to digitize and pay invoices more easily through the checking account, and mobile analytics to support mobile rate and inventory optimization.

These capabilities reflect several core challenges that Amalgam Insights notes in managing IT. First, cloud Infrastructure as a Service continues to grow extremely rapidly, with all major vendors outpacing industry estimates for revenue growth. Amalgam Insights expects IaaS to continue growing roughly 20% year-over-year, leading to a $275 billion dollar market in 2025. This IaaS trend is part of a bigger trend of public cloud (Software, Platform, and Infrastructure as a Service) where half of all new IT spend in 2021 will come from the public cloud and that the public cloud market will grow to be over $600 billion in 2025.

Second, this spend will come in to face the IT Rule of 30, which states that every unmanaged IT spend category will provide a potential 30% savings opportunity.

The IT Rule of 30 has gone undefeated across network, telecom, mobility, and software and it continues to reign in cloud. As the next $100 billion+ of IaaS spend comes in over the next five years, there will be many billions of dollars in cost savings opportunities.

Third, as IT is increasingly consumerized, companies have more flexibility than ever to choose their providers. However, vendor choice is only useful if companies can effectively manage the sourcing and procurement process. Otherwise, IT departments can fall prey to the analysis paralysis that occurs when the size and detail of data overwhelm the human ability to process data. Vendor choices need to be centralized and provided on an apples-to-apples basis to support effective IT purchases.

Amalgam Insights’ Recommendation

Amalgam Insights believes the combination of platform improvements along with vCom’s current reputation for customer service and managed services should be seen as a valuable combination of capabilities for mid-market organizations seeking both to manage IT costs across all subscription charges and hardware.

With this release, vCom has taken several big steps to quickly make enterprise-grade functionality available to its clients. vCom’s version 13.1 provides several meaningful upgrades for existing customers across cloud, mobility, and payments. Most importantly, this update allows vCom to support cloud costs at a time when mid-market organizations are increasingly either supporting or planning to support million-dollar cloud bills. Amalgam Insights recommends that companies considering a net-new solution for managing IaaS to consider vCom as a solution that will allow holistic visibility across the hybrid cloud (hardware and IaaS) as well as network, telecom, SaaS, collaboration, and mobility.

Key Stakeholders: Chief Information Officers, Chief Technology Officers, Chief Financial Officers, Finance and Accounts Payable Directors and Managers, Human Resources Officers, Procurement Directors, Telecom Directors and Managers, Mobility Directors and Managers, IT Architects, Vice President/Director/Manager of IT Operations, DevOps Managers, System Architects, Product Managers, IT Sourcing Directors and Managers, IT Procurement Directors and Managers

Why It Matters: Technology is a vital component of the business, but technology inventories and analytics are often updated too infrequently, inaccurately, and incompletely for the information to be relevant to real-time business decisions. MetaPort’s capability to map network elements and provide automated updates provides enterprises with greater visibility to the network, which will have downstream effects on the importance of network data for making business decisions.

Top Takeaway: With the acquisition of MetaPort, Calero-MDSL can provide its global customers with advantages in pursuing network transformation and consolidation, aligning network elements to business decisions, and accelerating IT’s ability to be a better partner to businesses.

On April 20, 2021, Technology Expense Management market leader Calero-MDSL, owned by Riverside Partners and Oak Hill Capital Partners, announced the acquisition of MetaPort, a telecom network mapping company. Andres Aguirre, founder and CEO of MetaPort will be joining Calero-MDSL through this acquisition. With this acquisition, Calero-MDSL customers will be better positioned to map their network environments, remove redundant or obsolete circuits, and prepare for network transformation projects.

Calero-MDSL is the current market leader in Technology Expense Management based on technology spend under management, with responsibility for over $14 billion in enterprise technology spend across telecom, network, mobility, software, cloud services, and other technology categories. Calero-MDSL also has a market data management product to support financial data subscriptions where Calero-MDSL is considered the market leader as well.

MetaPort was founded in 2017 and is headquartered in Coral Gables, Florida. MetaPort was founded with the assumption that IT departments could provide greater guidance to businesses if IT infrastructure data could be more transparent and accessible. With this focus, MetaPort has developed a tool that allows enterprises to quickly visualize a full inventory of their current network environment, view and track changes for network details as they are changed through automated updates, search this network information to find all relevant details, explore this data through drill-down and category-specific divisions of networks, and align all network data with its costs. This capability was already valuable to IT departments when MetaPort originally launched, but became even more valuable in the time of the COVID pandemic when the vast majority of technology workers were banished to their homes. As companies deal with the combination of new network investments made over the past year combined with employees’ incipient return to offices, the synchronization and coordination of network elements becomes even more critical to the delivery of technology and maintaining the backbone of connectivity necessary to support businesses in the digital era.

Network visibility is also a vital capability for the technology expense management world. One of the greatest tenets of technology expense management is that any effort to manage and cut costs is only as good as the data and metadata categorization and terminology used to define each piece of technology being managed. The network has long been both vitally important to understand and notoriously difficult to manage on an ongoing basis because of the relative ease of ordering network circuits to support branch offices, pet projects, or quickly emerging business needs associated with new products or services.

In this context, Calero-MDSL’s interest in MetaPort is clear. The ability to quickly gain a full enterprise inventory of network circuits is quite valuable for setting up cost-effective and performance-enhanced software-defined network environments, providing an enterprise environment that allows every employee and project to be sufficiently trunked with data, and to support an analytical view of the business based on the existing data backbone that defines organizational access to collaboration and information.

From an analytics perspective, the MetaPort acquisition is also important because the basis of good business intelligence, analytics, and machine learning is high-quality data that is well documented and updated in real-time. This level of data quality has often been missing in the technology expense management world, where inventories are often only updated when a change is provided on the invoice or when an audit of invoices and service orders is conducted.

Amalgam Insights hopes that this acquisition is part of a new trend in technology expense management that increasingly combines cost management with IT performance and business metrics. The long-term vision of technology expense management is one where technology as a fundamental core driver of business can be tracked from a financial perspective, not only to determine which costs can be reduced but also to understand which technology investments may need to be increased in order to improve business outputs and outcomes. Technology is not just a cost center in the digital era, but often a force multiplier and profit center when used correctly. As companies start to realize that a real-time, comprehensive, and business-mapped technology inventory is a strategic advantage, they will start to use this capability to forecast revenue, operational outputs, and future demand for increased or altered technology augmentation of business efforts.

Recommendations for the Technology Expense Management Community

Based on this acquisition, Amalgam Insights provides the following suggestions.

First, from a strategic perspective, Amalgam Insights urges all Technology Expense Management professionals to figure out how often their inventories are being updated and how complete these updates are in terms of updating cost centers, geographies, use cases, and other business-relevant information. It is not good enough to simply update this information once a year or upon request. Think of your inventories the same way that accountants look at their financial books as something to be monitored and verified on a monthly basis, if not more often. To do this means getting some help from technology built to discover and verify networks, device fleets, and access to cloud and software services. Find out how to accelerate inventory updates for the areas where you are responsible for expense management.

Second, Calero-MDSL customers should work with their Calero-MDSL account teams to get access to MetaPort as soon as possible. Getting automated updates to network hardware and services inventories is a key component to supporting a more connected business. This visibility is especially important for companies that are invested in the Internet of Things, edge computing, or distributed workers that use and share significant amounts of data. This is an area where customers should push Calero-MDSL both to make the capability available and to integrate with Calero-MDSL’s analytics, cost management, and inventory capabilities. Over time, this capability can also be mapped with network performance solutions and business performance maps to determine areas that may need more or less technology support over time.

Third, consider how to use technology inventories, tracked changes, and utilization to provide guidance to business environments. For instance, how does bandwidth support differ for sales-oriented locations compared to research-oriented locations? Are contact center locations ready to support a video-centric, data-centric, or augmented reality approach for high-touch service environments? Have specific areas required more frequent changes or updates because their performance is more variable or because they are having trouble forecasting their demand? Technology is part of the business and needs to be treated as such. Taking this approach is both an opportunity to make technology expense data more respected in the business and to be more involved in the strategic efforts of the business.

Overall, Amalgam Insights is bullish on this acquisition as it represents an opportunity for a major Technology Expense Management vendor to push the market forward in improving the quality, frequency, and variety of data being collected for network inventories. This change can potentially feed a variety of efforts to bring technology discussions and business imperatives closer together. As Calero-MDSL continues to integrate MetaPort into the core technology expense platform and starts to create products around MetaPort’s capabilities, Amalgam Insights expects that new opportunities will come up for technology expense that are more relevant to the CIO, CTO, and enterprise architect roles that are responsible for the strategic acquisition and deployment of technology.