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The Role of Finance in Enhancing the Value of Workforce Planning

“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

Red Adair

In 2023, workforce planning is significantly more challenging and requires a combination of headcount, skills, finance, sourcing, and automation management. We are facing a remarkable confluence of labor trends that force workforce management to be more closely tied to financial management. Workforce volatility is at a peak as the Great Resignation has led to a mass exodus that has been augmented in recent months by layoffs from companies that overstaffed in the now-halcyon days of the favorable market that has defined our economic environment over the past decade. At the same time, the demand for specialized talent continues as the need to market, sell, deliver, produce, and digitize is still there for companies that are still healthy. And all this is happening at a time of global inflation and currency exchange challenges leading to cost constraints and explorations of geographic arbitrage and automation to introduce and scale up skills. This financial uncertainty leads to the increasing need for finance to support the details of workforce planning to build better businesses.

But this combination of volatility and demand has led to a more uneven distribution of talent that must be reconciled. From a practical perspective, this means that it is more important to make a business case for each hire that accurately estimates the value of a new employee’s skills and capabilities with the expected revenue per employee ratio that the company seeks to achieve. New employees must bring a combination of organizational fit and rapidly deployable skills to their companies to create value in a timely fashion. Considering that the cost of finding, onboarding, and ramping up a new employee can range from $15,000 to $50,000 based on Amalgam Insights’ estimates, companies face the challenge of ensuring that new employees are put in a position to succeed. From a planning perspective, this means having hardware, software licenses, data access, training, and relevant employee relationships all defined on Day Zero or Day One rather than a penny-wise, pound-foolish approach of attempting to provide just-in-time access as employees demand it.

Workforce planning may also include investing in training or learning and development resources proactively as skills needs are forecasted, as the cost of training can be lower than the cost of hiring a new employee or finding a new consultant. From a financial perspective, it is important to conduct a cost analysis of skills acquisition based on the future-facing needs of the organization. Even in a cost-conscious environment, it takes money to make money. However, workforce investments must be focused on employees who will both create value quickly and have the mindset to provide long-term value through their problem-solving, self-improvement, and collaborative approaches. And in considering the cost of skills, companies need to consider both the need for hard skills such as process automation and machine learning as well as the need to teach and train soft skills such as effective project coordination and corporate communications skills. By accounting for skills that may only be needed on a short-term basis compared to those that represent long-term commitments for an organization, companies can prioritize workforce planning from a more quantitative and business growth-oriented perspective.

As companies consider the full cost of employee skills, companies also have to consider the fully loaded cost of an employee, including the resources and benefits associated with bringing an employee on board. The accounting for supporting employee productivity has become more complex in the face of COVID and the subsequent reimagining of the overhead associated with employees. At the peak of COVID, an estimated 40% of employees worked from home. Based on this trend, it was not difficult for organizations to start scrutinizing the real estate and other long-term assets and leases that have traditionally been seen as depreciable aspects of employee cost providing tax benefits over time. The increasing willingness to move headquarters and other large offices to more tax or cost-of-living-friendly locations as well as the tradeoffs between depreciation, asset sales, and leases are increasingly relevant to structuring workforce planning. Companies must readjust the cost assumptions of their workforce to reflect the new reality of their organization.

This set of assumptions does not simply mean that companies can assume that an employee will be fully remote or fully on-site, as this discussion is driven by a nuanced set of considerations. Remote workers have struggled to onboard and reach full productivity and younger workers have sought mentorship and leadership that has traditionally been provided on-site. On the other hand, experienced specialists point to greater productivity and efficiency when they work in remote environments where they run into fewer ad-hoc distractions and interruptions and can work more flexibly. [1] 

From a planning perspective, this may mean setting up scheduled hybrid assumptions for workforce overhead that include office space and physical resources on a monthly or quarterly basis depending on the roles involved. Real estate and other long-term assets/leases that have traditionally been seen as depreciable aspects of employee cost providing tax benefits over time, but with large office vacancies and the increasing willingness to move headquarters and other large offices, the tradeoffs between depreciation, asset sales, and leases are now increasingly relevant to structuring workforce planning. Amalgam Insights expects that 2023 will be a year where companies are still struggling to find the correct balance of office space and may find themselves overcompensating in ways that affect long-term productivity.

The cost of bringing a workforce to full productivity at scale is seen through a variety of data, including the United States economic census, which shows that small companies under 500 employees make approximately $220,000 per employee while large enterprises with over 5,000 employees make over $375,000 per employee. (SOURCE: United States 2017 County Business Patterns and Economic Census) This difference of over $150,000 speaks to the potential difference in productivity between employees who are fully supported at an enterprise level and their small business counterparts who presumably have less support, brand power, and capabilities to enhance their efforts.

But this increase is ultimately only possible by aligning workforce planning efforts with the financial planning and forecasting efforts that align talent and skills with business strategy and outcomes. Ultimately, workforce planning and business planning must be intertwined to be successful across business demand, skills, onboarding, and overhead.

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Cloud Cost Management Part 2: Organizations Are up Against Big Challenges in Cleaning Up Cloud Costs — COVID Cleanup, Skills Shortages

The first blog in this series on cloud management and optimization discussed why organizations must make the most of their cloud computing environments – especially as a recession appears likely.

Now, in this second  installment, Amalgam Insights analysts lay out the argument in favor of using third-party software, consultancies, and managed services to achieve optimal cloud management status.

We do so knowing that many executives, fearful of a global economic slowdown, might feel tempted to automatically resist the recommendation to bring on another vendor. Thus, we take a step back to paint a picture of the challenges organizations are up against, and share insight, based on collective years of experience, about why paying to manage the cloud environment will, when done right, deliver the greatest value.

Cloud Management and Optimization: It’s About Much More Than Saving Bucks

As a reminder, almost any cloud management and optimization activity can save costs, at least to some extent. That is, of course, useful to any business intent on conserving financial resources. However, more to the point is that cloud management and optimization should lead to more productive, efficient, and deliberate use of cloud computing. After all, cloud supports remote and hybrid workers, as well as strategic corporate initiatives. Therefore, it must deliver. Rarely (if ever, frankly) do organizations get the most out of their cloud environments by trying to monitor and manage cloud resources through spreadsheets or piecemeal efforts.

In other words, Amalgam Insights asserts that it usually makes sense to spend money on the well-chosen cloud management and optimization tools — tools that support revenue-generating initiatives, whether directly or indirectly. The adage, “Spend money to make money,” rings true here as companies seek to eliminate duplicate resources, select the right storage and compute options for data and workloads, and tweak environments so they perform at their best.

The third-party platforms to which we refer support cloud environments at scale. They remove dependence on ungovernable, internally created spreadsheets, on hastily created Git pages with inconsistent documentation standards, and on disparate notes.

Yet, before teaming with a cloud cost management and optimization software, or a professional or managed services provider, it is vital to understand the challenges all organizations share, as well as those that are more specialized, which may require a more custom approach. After considering all the guidance in Amalgam Insights’ 2022 report, Control Your Cloud: Selecting Cloud Cost Management in the Face of Recession, IT, finance, and data leaders should find themselves well-equipped to identify and choose among the options. (Any enterprise executives in search of independent assistance are invited to arrange a consultation with Amalgam Insights analysts. )

The Enterprise Challenges Addressed By Cloud Management and Optimization

Regardless of size, organizations relying on cloud computing face a variety of challenges, especially in the wake of COVID-19-fueled rollouts. Recall that the pandemic in early 2020 forced most businesses worldwide to increase adoption of cloud computing — whether infrastructure, platform, and/or applications — so they could remain operational amid lockdowns and economic upheaval.

The sudden flurry of deployments often was messy; IT personnel quickly spliced together cloud solutions to keep employees connected so they could work remotely. In most cases, there was little or no time to think about how many cloud environments were running.

Then, as enterprises shifted from full-on crisis to figuring out the New Normal of worker expectations, organizations generally did not pause to assess the state of their cloud environments. This typically came down to a lack of awareness or internal skills.

At the same time, the pandemic created a staff and skills shortage that continues into 2022 and will extend beyond 2023. As an example, a recent Korn Ferry study indicates that, by 2030, the world will experience a human talent shortage of more than 85 million people. The staffing challenge is real. When it comes to evaluating and managing cloud environments, there are simply fewer IT experts available to conduct this work for their employers.

Despite the skills shortage, finance executives have grown more aware of looking into and trying to track cloud computing expenses. Still, this presents another hangup for enterprises that do not manage their cloud estates. The finance department lacks the granularity of data that will deliver the reports and insights needed. These leaders need the information that supports asking the right questions of the IT department about cloud computing outlay — and that helps them allocate charges among business units. Simply put, most organizations do not have usable visibility into their cloud environments.

Assessing Cloud Governance, Security, and Provisioning

Alongside the previous challenge lie two more — an absence of governance and security. Organizations that do not properly manage their cloud computing environments risk running afoul of their own policies, not to mention possibly those of various governments. Many organizations also are enacting environmental and sustainability initiatives. A number of cloud cost management and optimization platforms now support those efforts; spreadsheets cannot.

In addition, speaking to security, cyber threats gain even more traction within unmanaged cloud environments. While responsible cloud stewardship does not guarantee insulation against hacks, an absence of said stewardship almost certainly guarantees a breach.

Finally, many organizations are operating in over-provisioned cloud environments due to a variety of situations — say, employee demands for certain applications, an enterprise’s regional or global footprint, and idle resources.

All of the factors combined make for a perfect storm where the organization overpays even as it jeopardizes governance, security, and budget.

To sum up, enterprises are up against the following cloud computing challenges (see Figure 1):

Figure 1: Key Challenges for Managing Cloud Computing

Yet organizations can — and, Amalgam Insights contends, must — take steps to overcome these circumstances. And with global recession fears mounting, the impetus to do so comes as more pressing than ever.

In the third blog in this series, Amalgam Insights will go deep into the value organizations stand to gain by partnering with a proven cloud management and optimization provider.

Need More Guidance Now?

Check out Amalgam Insights’ new Vendor SmartList report, Control Your Cloud: Selecting Cloud Cost Management in the Face of Recession, available for instant download. 

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HP Offers to Acquire Poly

On March 28, HP announced an offer of $3.3 billion to acquire integrated communications vendor Poly. Poly, created from the merger of Plantronics and Polycom, acquiring @PolyCompany is interesting because both firms have a long history of supporting remote and home offices. Both companies have dealt with the challenges of the digital office. But this acquisition hints at a potential split for HP.

HP is obviously known as a printer company and printer ink prices ($3,000 per gallon) make even the most expensive gas pumps look like amazing bargains. But HP also has its Z by HP workstation brand, which is well-aligned to the Poly portfolio. It would be great to see that combined Poly/Z portfolio come together as the future of the digital office and to create that new “office in a box” or “office in a browser” that is always a goal for tech companies. There are still a few gaps in the portfolio, though.

The starting point is good spatial audio. As Poly has known since its telepresence days, 2 big secrets to optimal video conferencing are life-sized video and spatial audio. Both are hardware accessory issues: camera & speakers. Poly is great at the former, so-so at the latter. To take this a step further, HP Poly can be the smart accessory (and maybe even the programmable accessory) company providing all of the accessories beyond the phone and PC to support a better office, but this also requires continued API investment. Poly could have been the smart watch & VR headset company, but didn’t keep up. The opportunity is still there if Poly takes the immersive home office seriously and provides the one-stop shop for transforming the kitchen/guest bedroom/garage/remote office room into a communications hub.

And all that video and audio data is an obvious fit with the #datascience @ZbyHP portfolio. So, if all this makes sense, what is the issue?

Printer Ink.

For HP to pursue this path, it must embrace a business model path with one eye towards the actual Metaverse: VR, AR, workflow digitization, & eliminating the need for print. Z/Poly provides an obvious set of next steps: smart accessories, continued growth of the developer community, process automation & workflow orchestration Printers can be a part of this future if they are “iPhoned” to support higher dpi & eliminate the need for constant ink but anybody who has ever tried to implement a printer from scratch knows just how prehistoric this experience is compared to the mobile, SaaS, Big Data world that is pervasive in our consumer lives where even our refrigerators and light bulbs are now able to give us recommendations.

Does HP have the stomach to truly disrupt itself over the next decade, as Netflix wiped out its mail business & destroyed the value of its DVD library? Or will it spin out Z/Poly to maximize value? Or will Poly become a cash cow held back by legacy HP? HP now has more tools to truly reinvent the digital home office when remote employees can dip into the real estate budget. It will be fairly clear within this calendar year which of these three options ends up being HP’s true intentions: wither, cash cow, or innovate.

For the sake of the innovative geniuses who have worked at Plantronics and Poly love the years, I really hope their technology gets a chance to reach the next level. And as an analyst, I look forward to seeing what big brains @blairplez @DaveMichels @zkerravala have to say about this proposed acquisition as I have found their guidance and perspective invaluable over the years as an analyst who has dabbled in their market.

From a Technology Expense Management perspective, the big takeaway here is that the telecom environment is going farther and farther away from the dedicated phone systems and now even mobile devices that have traditionally been the hub of voice and video. HP’s acquisition of Poly will be part of a trend of creating more focused home office solutions as the future of the hybrid workplace requires less investment in 100,000 square foot (10,000 square meter) headquarters spaces and more investment in the 20 square feet (2 square meters) that we choose to work in at any given point. These accessories will require purchasing and tracking just as all business assets require and may have additional connectivity or computational support demands over time just as smartwatches, connected Internet of Things devices, and devices using edge computing require. Connected devices belong in a unified endpoint management solution, but this HP acquisition may start leading to some questions as to whether remote office management is part of a managed print strategy, enterprise mobility strategy, or general IT asset strategy. Amalgam Insights recommends that remote office tech investment, which will eventually match enterprise mobility as a $2,000/employee/year total cost of ownership for all relevant hybrid and home employees, should be handled as part of an enterprise mobility strategy where device management and logistics have already been defined.

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Reviewing 2021 IT Cost Trends

IT Cost Management is one of the core practices at Amalgam Insights. This practice focuses on tracking both vendors and product offerings that help enterprises fight off the IT Rule of 30, Amalgam Insights’ observation that every unmanaged IT category averages 30% in bloat and waste and that this can be even greater for emerging technology areas such as cloud computing.

From our perspective, the demand for a more holistic technology expense capability has been in demand at the enterprise level since the mid-2010s and companies narrowly focused on managing telecom, mobility, software, and cloud computing as four separate IT silos will miss out on a variety of opportunities to optimize and rationalize costs.

In this practice, we tactically look at technology expense management vendors, including specialists in telecom expense, managed mobility services, cloud cost management, cloud FinOps (Financial Operations), Software as a Service management, IT finance solutions, hybrid cloud subscriptions and financing, and other new IT strategies that can lead to a minimum of 20-30% cost reduction in one or more key IT areas. In each of these IT areas, Amalgam Insights maintains a list of recommended vendors that have proven their ability to deliver on both identifying and fixing the issues associated with the IT Rule of 30, which are provided both in our published research as well as in our end-user inquiries with enterprise clients.

With that out of the way, 2021 was a heck of a year from an IT management perspective. Although a lot of pundits predicted that IT spend would go down in a year where COVID-driven uncertainty was rampant, these cost control concerns ended up being less relevant than the need to continue getting work done and the resilience of a global workforce ready and willing to get things done. In doing so, 2021 saw the true birth of the hybrid worker, one who is just as comfortable working in the office or at home as long as they have the right tools in hand. In the face of this work environment, we saw the following things happen.

The Rise of the Remote Employee – Amalgam Insights estimates that 30% of employees will never be full-time in-office employees again, as they have either moved home full-time or plan to only come into the office one or two times per week as necessary to attend meetings and meet with new colleagues and partners. Although many of us may take this for granted, one of the issues we still face is that in 2019, only 5% of employees worked remotely and many of our offices, technology investments, and management strategies reflect the assumption that employees will be centrally located. And, of course, COVID-19 has proven to be both a highly mutating virus and a disease fraught with controversies regarding treatment and prevention strategies and policies, which only adds to the uncertainty and volatility of in-office work environments.

Legacy networking and computing approaches fall flat – On-premise solutions showed their age as VPNs and the on-site management of servers became passe. At a time when a pandemic was running rampant, people found that VPNs did not provide the protection that was assumed as ransomware attacks more than doubled in the United States and more than tripled in the United Kingdom from 2020 to 2021. It turns out that the lack of server updates and insecure ports on-premises ended up being more dangerous for companies to consider. We also saw the Death of Copper, as copper wired telecom services were finally cut off by multiple telecom vendors, leaving branch offices and the “Things” associated with operational technology rudely left to quickly move to fiber or wireless connections.  Blackberry finally decided to discontinue to support of Blackberry OS as well, forcing the last of the original Blackberry users to finally migrate off of that sweet, sweet keyboard and join the touch screen auto-correct world of smartphone typers. It was a tough year for legacy tech.

Core Mobility Grew Rapidly in 2021 – Core spend was up 8% due to device purchases and increased data use. In particular, device revenue was up nearly 30% over last year with some of the major carriers, such as AT&T, Verizon, and T-Mobile (now the largest carrier in the United States). However, spend for customized and innovative projects disappeared both as 5G buildouts happened more slowly than initially expected and 5G projects froze due to the inability to fulfill complex mesh computing and bandwidth backfill projects. This led to an interesting top-level result of overall enterprise mobility spend being fairly steady although the shape of the spend was quite different from the year before.

Cloud Failures Demonstrated need for Hybrid and Multi-Cloud Management – Although legacy computing had its issues, cloud computing had its black eyes as well. 8760 hours per year means that each hour down gets you from 100% to 99.99% (4 9’s). Recent Amazon failures in November and December of 2021 demonstrated the challenges of depending on overstressed resources, especially US-1-East. This is not meant to put all the blame on Amazon, as Microsoft Azure is known for its challenges in maintaining service uptime as well and Google Cloud still has a reputation for deprecating services. No one cloud vendor has been dependable at the “5 9’s” level of uptime (5 minutes per year of downtime) that used to define high-end IT quality. Cloud has changed the fundamental nature of IT from “rock-solid technology” to a new mode of experimental “good enough IT” where the quality and value of new technology can excuse some small uptime failures. But cloud failures by giants including Akamai, Amazon, AT&T, Comcast, Fastly, and every other cloud leader show the importance of having failover and continuity capabilities that are at least multi-region in nature for mission-critical technologies.

Multi-cloud Emergence – One of the interesting trends that Amalgam Insights noticed in our inquiries was that Google Cloud replaced Microsoft Azure as the #2 cloud for new projects behind the market leader Amazon. In general, there was interest in using the right cloud for the job. Also, the cloud failures of leading vendors allowed Oracle Cloud to start establishing a toehold as its networking and bare-metal support provided a ramp for mature enterprises seeking a path to the cloud. As I’ve been saying for a decade now, the cloud service provider market is going the way of the telcos, both in terms of the number of vendors and the size of the market. Public cloud is now is $350 billion global market, based on Amalgam Insights’ current estimates, which measures to less than 7% of the total global technology market. As we’ll cover in our predictions, there is massive room for growth in this market over the next decade.

SD-WAN continues to be a massive growth market – From a connectivity perspective, Software Defined Wide Area Networks (SD-WAN) continue to grow due to their combination of performance and cost-cutting. This market saw 40% growth in 2021 and now uses security as a differentiator to get past what people already know. From an IT cost management perspective, this means that there continues to be a need for holistic project management including financial and resource management for these network transformation projects. Without support from technology expense management solutions with strong network inventory capabilities, this won’t happen.

As we can see, there were a variety of key IT trends that affected technology expenses and sourcing in 2021. In our next blog on this topic, we’ll cover some of our expectations for 2022 based on these trends. If you’d like a sneak peek of our 2022 predictions, just email us at info@amalgaminsights.com

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Zoom, Five9 Call Off the Wedding: What’s Next?

Reluctant shareholders have put the kibosh on Zoom’s intention to buy contact-center-as-a-service provider Five9. The deal would have amounted to almost $15 billion. 

But it was an all-stock deal. As it turns out, Five9 shareholders weren’t such fans of that structure. Zoom’s stock has declined 25% since the video conferencing behemoth announced in July it would buy Five9. Those share prices were not shaping up in Five9 investors’ favor. So, on Sept. 30, they voted against Zoom’s proposed, $14.7 billion purchase. As a result, Zoom and Five9 announced they had mutually terminated the acquisition.

Zoom had sought out Five9 for its cloud contact center expertise. Throughout the pandemic, organizations worldwide have relied on Zoom to keep their teams intact through video conferencing. To help users through uncertain times, Zoom has understood that it needs to deliver even more functional and appealing features, and it made good at Zoomtopia 2021. Part of its new platform announcements included the Video Engagement Center, which contains important contact center capabilities. Notably, though, Zoom debuted that component separate from any Five9 announcements. Did the company see Five9 shareholder rejection coming two weeks later or was it already planning to incorporate Five9 into its VEC portfolio? Either way, the answer might not matter much. Zoom and Five9 say they will still work together.

“We will continue to partner with Zoom like we did before, and just as we partner with other UC providers like Microsoft Teams, Nextiva, Mitel, and others,” Five9 told analysts in an Oct. 1 statement. “This allows us to offer customers the choice they often crave when looking at building out their [customer experience] ecosystem.”

Zoom CEO Eric Yuan said his company will “maintain our valued existing contact center partnerships with companies like Five9, Genesys, NICE inContact, Talkdesk, and Twilio.” 

Amalgam Insights believes Five9 did indeed present Zoom with an attractive acquisition target. The 20-year-old Five9 stands out as a pioneer in cloud contact center. It was among the first contact center developers to understand the need for multimodal chat — not just phone conversations, which often frustrate users enduring iffy interactive voice response, but giving agents and customers the ability to communicate over email, social media, chat function, and text. It also homed in on the importance of easy-to-access analytics to help improve the customer experience in real-time. Combining Zoom and Five9 would have added more heft to Zoom’s offerings. Nonetheless, for its part, Five9 is doing just fine on its own as a standalone public company (fluctuating stock prices notwithstanding); it boasts a $10.6 billion market capitalization. While a union between it and Zoom would have created a global giant, both companies can fuel success by partnering with one another — again, as they say they will do. 

Even so, Zoom needs to diversify. The company tripled its value over the past two years, thanks in no small part to COVID-19. Demand for its services led to an extra $50 billion (and counting) in its market cap and spending power. Now is the time for Zoom to prove it can hold onto, and keep powering, its dominant position. For sure, the company made waves at its Zoomtopia 2021 event in mid-September, giving Amalgam Insights analysts reason to predict the video conferencing provider is aware of the mandate in front of it. Zoom debuted much-needed enhancements — from live translation and transcription and Smart Gallery improvements to hot desking and events hosting — that promise to make video conferencing far more than a pandemic-related enabler. Zoom appears to be hyperfocused on innovation.

Still, if it decided to renegotiate a Five9 purchase with cash replacing some stock, the pairing would make a natural fit despite a first failed attempt. If that doesn’t happen, Zoom should keep an eye out for other unified communications and contact center players that would beef up its platform in unique ways. Five9, meanwhile, may be courted by the likes of Salesforce or Adobe as the contact center becomes an even more ferocious battleground for supporting customer centricity. Both of those companies are high on the list of vendors needing to augment their video conferencing platforms with differentiated integrations, and both have deep pockets.

Overall, even if Zoom does not retool its bid, or if Five9 moves on to greener pastures, both Zoom and Five9 must stay trained on the future. Hybrid work represents the next major paradigm for organizations, and it’s a challenging one for them to navigate. They have to accommodate in-office and remote workers, and many of those people will flow between the two modes. This calls for stringent attention to concerns including data protection, yet requires easy-to-use tools and omnipresent support for the shifts between in-person and at-home working. The vendors that make hybrid work simple and smooth are the ones that will prevail. As Zoom continues its mission to “make video communications frictionless and secure,” it must continue to lead both with the innovation and flexibility that made it a surprise hit in 2020. And regardless of whether Five9 is acquired or remains an independent vendor, the demand for omnichannel and preferred channel support will stick. As such, Five9 will keep evolving cutting-edge technologies to improve the state of customer interaction.

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Market Alert: Box Acquires SignRequest to Develop Internal Electronic Signatures

Key Takeaway: “This opportunity for existing Box customers to embed e-signature more deeply into their document approval processes is a multi-billion dollar opportunity when the analytics, automation, workflows, and business process optimization opportunities are all taken into account.”


On February 3, 2021, Box announced its intention to acquire SignRequest, a Dutch e-signature vendor founded in 2014, for an estimated $55 million to develop Box Sign. Box plans to launch Box Sign in the summer of 2021 and to make it available both for personal and enterprise plans. Amalgam Insights believes this is an interesting opportunity for multiple reasons.

First, consider that Box’s entire go-to-market strategy is driven around placing enterprise standards around cloud-based content. This has always been its key driver and was the foundational starting point for allowing Box to succeed at a time when cloud-based content management system startups were popping up like wildfire a decade ago. As a starting point, let’s just use “enterprise standards” as a shorthand to describe the governance, security, analytics, and automation necessary to translate basic data and activity into the context and foundation needed to support businesses. Adding e-signatures allows Box to better serve its pharmaceutical, healthcare, government, legal, & other regulated clients with contractual & personal information transfers.

Second, the emergence of the COVID pandemic has driven the need to develop remote work capabilities and highlighted weaknesses in paper-based workflows that organizations have avoided for decades. The disease-driven digital transformation happening now is forcing companies to conduct the operational equivalent of changing the tires on a car while driving on a highway and requires complex problem-solving solutions that are well-packaged and readily available. This need drove the revenue of enterprise Software-as-a-Service companies in 2020 and will continue to drive growth as the majority of companies still need to fill gaps in their digital work toolsets.

Third, with internal e-signature, Box can now add human trust, activity, response time, & human-driven automation to a variety of documents and activities where it was previously dependent on partners. Human sign-off is a key data component, but it’s not the be-all, end-all of work. This is an opportunity to add signature-based approval as a foundational metadata component to every document, workroom, and content-based collaboration that Box supports, which is a vital area that no company has fully conquered. Looking at the enterprise market, companies that have started taking on this challenge include Workiva and ServiceNow, which are both obviously cloud SaaS darlings both from a revenue growth and valuation perspective.

I’m hoping this is a step towards Box being a Workiva (and eventually ServiceNow) competitor and starting to push activity analytics, machine-learning driven optimizations, and workflow capabilities to themarket. The content activity Box supports has immense latent value in benchmarking, authorizing, and rationalizing work. This trusted activity was one of the areas that some analysts, including myself, hoped that Blockchain would serve. But reality has proven that unlocking value from trusted activity requires hybrid activity that includes people, documents, and transactions.

This hybrid activity management along with the analytics, automation, trust, and force multiplier productivity that could result from this combination of human trust, document context, timely context, and related documents and workflows is the true promise of this acquisition. Existing document management vendors either lack the enterprise governance, platform standardization, automation, or functional capabilities to bring authorization and work together to the masses in a cost-efficient manner. Box’s business model that includes both freemium and enterprise models provides a unique opportunity to bridge the gaps in e-signature adoption, content, and business scale to provide both a better e-signature product and a next-generation trust platform driven by e-signature.

The takeaways here are two-fold. First, look closely at Box to see how they bring Box Sign to market in 2021. This opportunity for existing Box customers to embed e-signature more deeply into their document approval processes is a multi-billion dollar opportunity when the analytics, automation, workflows, and business process optimization opportunities are all taken into account. Second, expect enterprise workflow and content vendors ranging from ServiceNow to Workiva to OpenText to both change their esignature offerings and to start a product war to support greater advancement in signature-based capabilities, data management, and analytics as Box threatens to change the game.

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The Complexities of Managing Cloud Spend

COVID-19 shows no signs of letting up in the United States. For IT, finance and procurement professionals supporting remote staff, this continues to present expense management challenges. In recent blogs and webinars, Amalgam Insights showcases ways to maneuver these issues as they relate to telecom and networking, mobility, SaaS; we’ve also provided in-depth recommendations for understanding the six stages of COVID IT.

Now we go into detail about a particularly difficult, yet critical, area to assess: cloud IaaS. Even if you have decades of experience evaluating telecommunications and IT invoices, cloud is a whole different animal. And I say “critical” because of all IT categories, cloud IaaS stands out as the one that will experience spending growth in 2020, given that it best meets the needs of a distributed workforce. Both of these realities add pressure to the expense management team’s responsibility to uncover and control costs tied to the organization’s technology environment. 

Managing IaaS: 3 Core Challenges and Their Solutions

The influx of cloud services during the COVID-19 pandemic is highlighting issues that already existed but that expense managers may not have yet tackled. Takeaway? In a recessionary climate, you can’t put off addressing these challenges.

1. Huge Growth

Again, cloud spending will soar this year. Amalgam Insights expects public cloud spend to increase by an average of 30% across all enterprises. This may cause problems, if it hasn’t already, with budgets. But operating according to the IT Rule of 30 should help. That’s our calculation that any unmanaged category of IT contains about 30% waste.

So even though you’ll see about 30% growth in cloud, you may be able to reduce spending by the same amount with mature oversight.

2. Extremely Detailed Billing  

Compared to telecom, cloud features even more granular invoicing. This applies to every cloud service or component the organization uses. Expense managers have to scour and inspect cloud invoices line by line to avoid missing anything, ideally with programmatic tools or algorithms to help manage the Brobdingnagian challenges of cloud bills.

3. Lack of Standardization

Cloud is no Ma Bell. The various vendors have never worked together and do not plan to work together. This means there is no standardization for billing terminology or structure. Your enterprise may benefit by creating or obtaining a glossary and ontology that brings together, correlates and defines the providers’ different references.

Spotting Opportunities for Cloud Cost Management

Organizations must get a handle on their 2020 cloud expenses now. COVID-19 has upended budgets, forecasts and consumption. Following these near-term suggestions will help IT, finance, and procurement regain control.


Identify the Cloud Boss(es). When it comes to the business side of cloud computing, most environments don’t have someone in charge. Now is the time to designate a person or team – executive and managerial stakeholders in charge of planning and budgeting – to oversee the business of cloud. Amalgam Insights has noticed cloud expense and planning tends to be a hybrid role. The ideal candidates usually have expertise in IT, finance/accounting, and procurement. Knowing that, some titles to consider are: Chief Information Officer; Controller; Chief Digital Officer; Vice President of Cloud; Chief Architect. By identifying an executive responsible for cloud and gaining the attention of this champion, cloud accountability becomes a bigger deal.


Analyze Service Usage. Cloud features myriad buckets and use cases. Therefore, IT has to pinpoint what goes where, why, and whether to tweak any ancillary resources (networking, as the primary example). As an example of the latter statement, consider Zoom’s recent partnership with Oracle Cloud. Since the beginning of COVID-19, demand for Zoom has rocketed into the hundreds of millions of users. Service degradation was inevitable. Zoom needed help and turning to Oracle helped it save what we estimate to be over 80% on its cloud networking costs, while achieving necessary failover and business continuity requirements. But speaking to our assertion that IT has to figure out how cloud resources are allocated, the answer isn’t always “off premises.” If you’re archiving core applications on-site, and even with legacy tools, you can probably keep operating that way. Financially and otherwise, this may still be the wisest choice.

Optimize Cloud Services. Businesses adopted a lot of cloud services between March and June of this year, often without realizing it as staff scrambled to work from home (shadow IT, anyone?). That created a situation ripe for optimization. Here are our top recommendations for saving money on cloud spend:

  • Check bills for duplicate resources and eliminate any that are doing the same job (if doing so won’t impact workflows).
  • Rationalize, and potentially turn off, idle services.
  • Right-size resources. In other words, understand how the cloud environment will change as the organization grows or shrinks. Pro Tip: Have a contingency plan and a backup vendor in case usage doubles or triples. The goal isn’t to wholesale migrate all your services to a new vendor, but to be able to add overflow or additional computing and services that may be more cost-efficient or agile onto another vendor.
  • Review discounts to make sure they are actually showing up on the bill. Cloud pricing is almost always accurate but providers do seem to have issues getting the agreed-upon discounts right. 
  • Look at workload times. Turn off workloads when employees aren’t using them or at least turn them down during non-peak times.
  • Assess expiration dates. Which cloud resources have an expiration date and which don’t? Find out whether any cloud platforms are used for testing or development. Wherever it makes sense, ask cloud providers to remove expiration dates. 

Ensure Project Governance. Don’t just bring in more cloud resources on a whim. This will create more mess. Instead, take a step back. You want to do right by the organization, avoiding waste rather than adding to it. The goal is to “measure twice, cut once.” Start by tagging and categorizing all existing cloud services, tracking both technical details as well as relevant business categories based on the general ledger and project management solutions. Tagging will enable essential tracking capabilities, and we explore this idea in greater depth below. Then assign expiration dates and vendor commitments – this is also where having a cloud boss comes in handy. After that, conduct a thorough review before launching any new cloud service into production mode. Turn off all test platforms so the organization does not keep paying for them. 

Tag Categories. This practice is vital to cloud expense management best practices. How well the organization tags and categorizes cloud services plays directly into the efficacy and clarity of IT spending. IT needs to know why things happen in the cloud environment, and that won’t be apparent without tagging.

Here are the areas Amalgam Insights has identified as the most useful for tagging and categorizing:

  • Cross-charging: Link all cloud spending to the general ledger.
  • Project ownership: Every project and resource should have an owner and be assigned to that person. This works out most optimally if that person holds some level of IT responsibility with the business. Be sure to link this information to the human resources system, too.
  • Service priority: Make sure all cloud platforms used for testing and production are identified and have the appropriate service prioritization in place.
  • Region: Follow all cloud governance risk management best practices for every geography in which the organization operates. You don’t want to breach any compliance requirements.

Study Contractual Commitments. There are six main buckets to review for opportunities to save money on cloud expenses:

  1. Time commitments: Cloud vendors often extend more discounts or more flexible terms to organizations that agree to use their services for multiple years.
  2. Payment terms: Will paying upfront or over time serve the best interests of the business? It may be time to negotiate some flexibility depending upon the answer.
  3. Potential growth or reduction: Build a number of scenarios based on different expectations; for example, operational usage may stay the same but software development or research teams may need to add machine learning workloads. That will affect pricing. Make contractual agreements based on those changes.
  4. Potential investment in apps: What cloud usage is projected for the new apps being created? What data will they create and what services will they need to access? Although developers cannot fully predict usage patterns, the business needs to have a basic idea of potential cloud cost impacts and how app demand will change cloud costs.
  5. Regional concerns:  Figure out which regions need most access to the cloud, as regional pricing for services can vary significantly, leading to potential arbitrage opportunities.
  6. Discounts: As discussed already, cloud vendors often get the pricing right yet omit the discounts or tiering changes. Make sure the organization gets the agreed-upon concessions.

Conclusion: Recommendations for the Future

Think about managing cloud expenses, especially during COVID-19, as doing your part to act as a steward of the business. As we’ve said before, every $100,000-$200,000 in IT expenses saved equates to a job saved or reinstated. When it comes to the cloud side of the house, introducing automation and reducing total cost of ownership are two additional ways to achieve that goal. Remember, cloud itself doesn’t just represent a cost-cutting measure compared to on-premises data centers, it’s also a tool that saves labor and provides for ongoing business agility and access to services that are more resilient to technical debt. The current economic climate is tough. People have a lot less time (and patience) for activities such as setup, administration, business continuity/disaster recovery, upgrades and performance tuning. Automate as many of these tasks as possible. Sure, that might mean opting for a more expensive cloud that comes with better Key Performance Indicators and Service Level Agreements. Incrementally, though, this will provide more value than a cheaper counterpart.

Alongside automation and the Total Cost of Ownership, don’t overlook the benefits of data and application development. As cloud vendors show their reluctance to hedge on discounts or payment terms, companies with skills in writing more optimized code and supporting better data management will have advantages in optimizing and cleaning up the cloud environment. 

Above all, you don’t have to do all this alone. There are a number of vendors Amalgam Insights recommends that specialize in cloud expense management. Here they are, in alphabetical order:

  • Apptio Cloudability
  • BMC
  • Calero-MDSL
  • CloudCheckr
  • CloudHealth by VMware
  • Flexera
  • MobiChord
  • Snow Software
  • Tangoe
  • Upland Software
  • vCom

Keep in mind, each vendor takes different approaches and has different areas of strength. We recommend investigating each one to see how it fits your environment and needs. If you need unbiased help assessing the options, call on Amalgam Insights. 

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If you are seeking outside guidance and a deeper dive on your IT environment, Amalgam Insights is here to help. Click here to schedule a consultation.

Join us at TEM Expo, currently available on-demand until August 13 at no cost, to learn more about how to prepare for COVID IT and take immediate action to cut costs. In particular, check out sessions by Robert Lee Harris and Corey Quinn on managing cloud costs and avoiding the biggest mistakes that cloud vendors won’t tell you about.

  • Robert Lee Harris
  • Corey Quinn
  • …and Billie
Robert Lee, Corey Quinn… … and Billie speak about Cloud Costs at TEM Expo

And if you’d like to learn more about this topic now, please watch our webinar.

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Work in the Time of Corona: An Alert for the Amalgam Community

Summary: This piece provides guidance on:
Novel coronavirus (COVID-19) has wreaked havoc on the tech workplace in the early part of 2020. And, like the great Gabriel Garcia Marquez novel “Love in the Time of Cholera,” we all face legitimate challenges in deciding how rational and detached or how personal and connected to be at a specific time in history.

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How Red Hat Runs

This past week at Red Hat Summit 2019 (May 7 – 9 2019) has been exhausting. It’s not an overstatement to say that they run analysts ragged at their events, but that’s not why the conference made me tired. It was the sheer energy of the show, the kind of energy that keeps you running with no sleep for three days straight. That energy came from two sources – excitement and fear.

Two announcements, in particular, generated joy amongst the devoted Red Hat fans. The first was the announcement of Red Hat Enterprise Linux version 8, better known as RHEL8. RHEL is the granddaddy of all major Linux distributions for the data center. RHEL8, however, doesn’t seem all that old. As well as all the typical enhancements to the kernel and other parts of the distro, Red Hat has added two killer features to RHEL.

The first, the web console, is a real winner. It provides a secure browser-based system to manage all the features of Linux that one typically needs a command line on the server to perform. Now, using Telnet or SSH to log in to a remote box and do a few adjustments is no big deal when you have a small number of machines, physical or virtual, in a data center. When there are thousands of machines to care for, this is too cumbersome. With web console plus Red Hat Satellite, the same type of system maintenance is much more efficient. It even has a terminal built in if the command line is the only option. I predict that the web console will be an especially useful asset to new sysadmins who have yet to learn the intricacies of the Linux command line (or just don’t want to).

The new image builder is also going to be a big help for DevOps teams. Image builder uses a point and click interface to build images of software stacks, based on RHEL of course, that can be instantiated over and over. Creating consistent environments for developers and testing is a major pain for DevOps teams. The ability to quickly and easily create and deploy images will take away a major impediment to smooth DevOps pipelines.

The second announcement that gained a lot of attention was the impending GA of OpenShift 4 represents a major change in the Red Hat container platform. It incorporates all the container automation goodness that Red Hat acquired from CoreOS, especially the operator framework. Operators are key to automating container clusters, something that is desperately needed for large scale production clusters. While Kubernetes has added a lot of features to help with some automation tasks, such as autoscaling, that’s not nearly enough for managing clusters at hyperscale or across hybrid clouds. Operators are a step in that direction, especially as Red Hat makes it easier to use Operators.

Speaking of OpenShift, Satya Nadella, CEO of Microsoft appeared on the mainstage to help announce Azure Red Hat OpenShift. This would have been considered a mortal sin at pre-Nadella Microsoft and highlights the acceptance of Linux and open source at the Windows farm. Azure Red Hat OpenShift is an implementation of OpenShift as a native Azure service. This matters a lot to those serious about multi-cloud deployments. Software that is not a native service for a cloud service provider do not have the integrations for billing, management, and especially set up that native services do. That makes them second class citizens in the cloud ecosystem. Azure Red Hat OpenShift elevates the platform to first-class status in the Azure environment.

Now for the fear. Although Red Hat went to considerable lengths to address the “blue elephant in the room”, to the point of bringing Ginny Rometty, IBM CEO on stage, the unease around the acquisition by IBM was palpable amongst Red Hat customers. Many that I spoke to were clearly afraid that IBM would ruin Red Hat. Rometty, of course, insisted that was not the case, going so far as to say that she “didn’t spend $34B on Red Hat to destroy them.”

That was cold comfort to Red Hat partners and customers who have seen tech mergers start with the best intentions and end in disaster. Many attendees I spoke drew parallels with the Oracle acquisition of Sun. Sun was, in fact, the Red Hat of its time – innovative, nimble, and with fierce loyalists amongst the technical staff. While products created by Sun still exist today, especially Java and MySQL, the essence of Sun was ruined in the acquisition. That is a giant cloud hanging over the IBM-Red Hat deal. For all the advantages that this deal brings to both companies and the open source community, the potential for a train wreck exists and that is a source of angst in the Red Hat and open source world.

In 2019, Red Hat is looking good and may have a great future. Or it is on the brink of disaster. The path they will take now depends on IBM. If IBM leaves them alone, it may turn out to be an amazing deal and the capstone of Rometty and Jim Whitehurst’s careers. If IBM allows internal bureaucracy and politics to change the current plan for Red Hat, it will be Sun version 2. Otherwise, it is expected that Red Hat will continue to make open source enterprise-friendly and drive open source communities. That would be very nice indeed.

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Cloud, Watson, & Blockchain: Amalgam Insights’ View of IBM Interconnect

From Pixabay
From Pixabay

Amalgam Insights (AI) recently attended IBM Interconnect under the Social Influencer program with the goal of understanding how IBM is planning to position itself in context of technology market changes, investor demands to increase revenue, and the challenges of embracing innovation as one of the largest enterprises on the planet.

In observing IBM over the past few years, AI investigators have noted in the past that IBM faces the challenge of needing to create billion-dollar businesses just to maintain existing revenue. It is not enough for IBM to create a single startup such as Pivotal or Airwatch that ends up becoming a market leader in analytic application development or enterprise mobility. To drive 80 billion+ dollars in annual revenue, IBM needs to grow enough businesses to maintain pace while simultaneously divesting cash cows and declining margin businesses that are not strategic to future growth. Over the past couple of years, this has meant selling off assets such as Salary.com and semiconductor chip manufacturing (and possibly its mainframe division) while investing deeply into systems and capabilities that will drive upcoming business capabilities.

At Interconnect, IBM provided its vision for upcoming success focused on three areas: IBM Cloud, Cognitive computing services highlighted by Watson, and the promise of Blockchain.
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