TEM Market Leaders Calero and MDSL Merge as Global IT Spend Management Consolidation Continues

Key Stakeholders: Chief Information Officer, Chief Financial Officer, Chief Accounting Officer, Controllers, IT Directors and Managers, Enterprise Mobility Directors and Managers, Networking Directors and Managers, Software Asset Directors and Managers, Cloud Service Directors and Managers, and other technology budget holders responsible for telecom, network, mobility, SaaS, IaaS, and IT asset and service expenses.

Why It Matters: The race for IT spend management consolidation continues. The financial management of IT is increasingly seen as a strategic advantage for managing the digital supply chain across network, telecom, wireless, cloud, software, and service portfolios.

Top Takeaway: The new combined business with over 800 employees, 3,500 customers, and an estimated 2 million devices and $20 billion under management both serves as legitimate competition for market leader Tangoe and an attractive potential acquisition for larger IT management vendors.

[Disclaimer: Amalgam Insights has worked with Calero and MDSL. Amalgam Insights has provided end-user inquiries to both Calero and MDSL customers. Amalgam Insights has provided consulting services to investors and advisors involved in this acquisition.]

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3 Big 2019 Trends and 4 Strategic Tips for Managing the Transforming Cost of Technology

Amalgam Insights estimates that the total technology spend formally and centrally managed by enterprises with over $1 billion in revenue from telecom, network, mobility, Software-as-a-Service (SaaS), and Infrastructure-as-a-Service will double from June of 2019 by the end of 2021 driven by the massive growth of cloud computing and the need to manage a variety of “shadow IT” costs that grow to the size that formal management is required.. By “formally and centrally managed,” Amalgam Insights assumes full visibility of inventory, contracts, billing, and service orders across all vendors with active usage and supplier optimization efforts.

In 2019, Amalgam Insights notes several key trends in the world of technology expense management that IT organizations should be aware of.

First, every IT expense management solution is increasingly focused on cloud-based expenses, either in terms of Software as a Service or Infrastructure as a Service. Established Software Asset Management (SAM) companies are working on their SaaS expense capabilities including Aspera, Flexera, ServiceNow, and Snow Software and a variety of standalone vendors including Alpin, Binadox, Cleanshelf, Intello, Torii, and Zylo are emerging. Amalgam Insights is planning a SmartList for November 2019 to focus on key vendors to manage SaaS across the SaaS expense, SAM, and Technology Expense markets.

On the IaaS side, every major global Technology Expense Management solution has launched IaaS management capabilities, also known as FinOps or Cloud FinOps, including Asignet, Calero, Cass Information Systems, Cimpl, Dimension Data, MDSL, Sakon, and Tangoe. In addition, this market has been an area of rapid acquisition over the past couple of years including Microsoft’s acquisition of Cloudyn, Apptio’s acquisition of Cloudability (which calls this practice “FinOps”), and VMware’s acquisition of CloudHealth Technologies. And there are still standalone players such as Cloudcheckr in this space as well. This crowded market seeking to manage the next $100 billion of public cloud spend represents an interesting set of choices for IT departments in choosing how to aggregate and manage IT spend.

(As an aside, Amalgam Insights finds the use of the term “FinOps” by Apptio and Cloudability to be an interesting way to coordinate multiple departments and provide guidance on how to manage cloud expenses. At the same time, FinOps seems to be recreating the wheel to some extent in rebuilding a set of practices and cross-departmental teams that already have been managing telecom expenses for a number of years. Amalgam Insights is quite interested in seeing how this duplication of effort within IT departments will sort itself either by the establishment of separate Cloud FinOps departments, integration of Cloud FinOps and “Telecom FinOps” a.k.a. Telecom Expense Management, or the integration of both cloud and telecom into a larger IT expense or finance role. This is an interesting transitional period for IT expense as more spend moves to subscription, usage, feature, user, department, and project-based spend and chargeback models. )

A third key trend is the move to Europe. European IT is being targeted as an area that has traditionally been informally managed or managed in geographic silos that prevent strong global management and alignment with strategic enterprise efforts. To solve this problem, there has been a variety of acquisitions and office launches across Europe as the likes of Calero, MDSL, Tangoe, Flexera, Snow Software, Cloudcheckr, ServiceNow, VMware, and others. Amalgam Insights notes that European IT management challenges have been poorly supported in the past by global vendors that have not adequately accounted for the differences in managing data, connectivity, and compliance in each European country and the relative lack of geographic footprint to support services. In light of this, Amalgam Insights has been tracking European IT management successes and provides guidance on this topic for end user, investor, and vendor advisory clients.

To prepare for this evolution in technology expense management, Amalgam Insights provides the following guidance for Chief Information Officers, Chief Procurement Officers, Chief Accounting Officers, and related IT procurement, finance, and expense managers to prepare for the second half of 2019 and beyond based on prior guidance and research.

$100K and 30% are key benchmarks for specialized IT spend categories. Once an IT spend management category exceeds $100,000 per month, organizations start having the potential to save at least one employee’s worth of payroll through optimization by pursuing the 30% savings that typically exist in a previously unmanaged environment that has not been formally managed or audited over the last five years. At this point, your company should start looking for a dedicated solution for expense management, whether it be manual support from an in-house employee with telecom experience, a software platform to support management, or managed services to support contract, invoice, inventory, and usage management. These rules of thumb are especially true in SaaS and IaaS management, which are currently rife with poor governance, duplicate spending, and unmonitored usage patterns associated with decentralized cloud computing purchases.

Enterprise buyers at Global 2000 companies should review their current strategy for IT spend categories with the goal of supporting all cloud, software, hardware, network, and mobility spend from a usage and subscription-based perspective. IT is moving to a subscription and usage-based paradigm that started by enterprise telecom and then evolved through the enterprise adoption of cloud computing. Firms currently considering new or replacement IT expense vendors, due diligence in understanding prospective vendors’ roadmap and experience for new technology categories is vital for futureproofing this investment. This is especially true in an “As-a-Service” world where all aspects of IT are increasingly being sourced and billed in a telecom-like function which shifts these vendor relationships from traditional asset-based approaches to subscription and relationship-based approaches. Look for depth in the following functional areas: inventory, invoice line-items, service orders, disputes, optimization, governance, and security.

Customer satisfaction, geographic expertise, vertical expertise, and depth of managed and professional services are key differentiators. Amalgam recommends that companies looking at TEM solutions focus not only on the technical aspects of invoice and inventory management, but on the alignment between the vendor’s expertise and the potential buyer’s geographic footprint and business model. This alignment is often more important than the extremely granular Request for Proposals that Amalgam has seen in this industry. In 2019, there have been a number of specific trends in this regard, such as the telecom expense management market’s push towards aggregating European spend among market leaders, focus on providing additional managed services such as security and managed mobility, and vertical-specific cost management focuses that also include specific asset management and IT management strategies. Customer retention and satisfaction are also key metrics. For mature solutions, it is not uncommon to see annual customer retention metrics above 95% and to see an year-over-year increase in wallet share as new cloud and app spend is brought into a solution.

Rather than ask hundreds of questions where there is little to no differentiation, such as how invoices are processed and whether a specific type of inventory can be stored within the solution, focus on how the vendor supports the usage and management of value-added technology. The goal of IT is not to restrict the use of helpful technologies, but to increase the use of productivity-driving and outcome-improving technologies and then to providing that optimal level of utilization in a cost-effective manner. Spend management vendors that can help identify technology associated with revenue growth or customer satisfaction provide a competitive edge in understanding the cost-basis of strategic IT. By taking these steps, companies can start to better understand how to manage IT spend more practically.

(Note: This piece is an excerpt from Amalgam Insights’ upcoming SmartList for Technology Expense Management Market Leaders scheduled to publish in August 2019. If you would like more information about this topic, if you are considering a net-new or replacement purchase for IT expense management, or are interested in the upcoming report, please feel free to contact us at info@Amalgaminsights.com)

Five Vital Sourcing and Vendor Management Recommendations for Complex Technology Categories

As part of Amalgam Insights’ coverage of the Technology Expense Management market, we provide the following guidance to sourcing, procurement, and operations professionals seeking to better understand how to manage technology expenses. In immature or monopoly markets where one dominant vendor provides technology services, vendor management challenges are limited. Although buyers can potentially purchase services…

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Amalgam Insights: 2019 Shaping Up as “Turbulent” Year for Technology Budgets, With Cost Controls Taking Center Stage

Technology Expense Management, analyst firm says, can help companies adopt a “more careful approach…and a cost-efficient working environment.”

A new report from industry analysts Amalgam Insights warns that this year will represent what it calls a “change for companies that have managed digital transformation & technology investment in bull markets” of the previous several years. But it says several sectors within the technology expense management (TEM) environment remain posted for significant growth, with the telecommunications industry leading the way, with a projected 15-20 percent spending increase.

Amalgam Insights chief analyst Hyoun Park authored the new report, saying the enterprise mobile sector spend will be a key driver. He says spending in this area should increase by as much as 15 percent in 2019, driven by what he calls “the incessant demand for mobile data from apps, video, music, and other persistent and constantly updating workloads.”

He also predicts that Amazon Web Services, Microsoft and Google Cloud Platform will continue to rake in more revenue, with an estimated run rate of $30 billion this year; he projects that amount could easily hit $50 billion in 2020.

Other predictions from the new Amalgam Insights report:

  • Software as a Service (SaaS) will be a $75 billion market by next year;
  • The Internet of Things (IoT) market will continue to be in flux, due to its complexity, with companies challenged to monetize the two billion non-cellular Internet of Things devices to be created for industrial, commercial, and enterprise; and
  • Most importantly, the technology expense market will double to more than two billion dollars over the coming year.

“Over half of enterprises do not have basic technology spend practices in place,” Park says. “The most frequent mistake these companies make is assuming that they’ve assigned a person to processing telecom invoices, so those people know how to manage and optimize telecom bills and contracts, which is usually not true.”

The full Amalgam Insights report is available for download at: https://amalgaminsights.com/product/analyst-insight-7-key-technology-expense-management-predictions-for-2019

From Calero World Online: From TEM to ITEM: Leveraging TEM for Non-Traditional Expenses

On October 18th, I presented a webinar at Calero World Online on the future of IT cost and subscription management. In this presentation, I challenge existing telecom and IT expense management managers to accept their destiny as pilots and architects of enterprise digital subscriptions.

Telecom expense has traditionally been the most challenging of IT costs to manage. With the emergence of software-as-a-service, cloud computing, the Internet of Things, and software-defined networks, the rest of the IT world is quickly catching up.

In this webinar, you will learn:

  • How the latest trends and technology are driving change to enterprise management strategies
  • How the challenges of traditional TEM and cloud expense management are similar in nature (and why TEM is a good place to start)
  • How organizations are benefiting from ITEM best practices using sample use cases

To learn more about the upcoming challenges of IT expense management, aligning technology supply to digital demand, and being the shepherd for your organization’s technology sourcing, utilization, and optimization, click here to watch this webinar on-demand.

Tangoe Makes Its Case as a Change Agent at Tangoe LIVE 2018

Key Stakeholders: CIO, CFO, Controllers, Comptrollers, Accounting Directors and Managers, IT Finance Directors and Managers, IT Expense Management Directors and Managers, Telecom Expense Management Directors and Managers, Enterprise Mobility Management Directors and Managers, Digital Transformation Managers, Internet of Things Directors and Managers On May 21st and 22nd, Amalgam Insights attended and presented at Tangoe LIVE…

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The Enterprise Technology Management Association Focuses on Making Tech Affordable

From April 2-4, 2018, the Enterprise Technology Management Association (ETMA, previously known as TEMIA) met in Nashville. This meeting brought together over 40 vendor organizations focused on various aspects of technology management including network, telecom, mobility, software, cloud infrastructure, utilities, and the Internet of Things. ETMA’s members are mainly focused on telecom expense management, managed mobility services, and related technologies.
What is ETMA?
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GSG Rebrands as Sakon and Launches the Sakon Platform

GSG Sakon Market Milestone

Note: This blog contains excerpts from Amalgam’s Market Milestone document. For the full story, including additional context and recommendations for Global 2000 organizations, purchase the full report.

Key Stakeholders: CIO, CFO, IT Finance, Telecom Managers, Network Managers, Mobility Managers, Software Asset Managers.

Key Announcement

On January 17th, Sakon, formerly known as GSG, announced the launch of the Sakon platform, a Software as a Service suite of six applications to support the following areas: Mobility and Internet of Things Service Management, Network Services, Cloud Applications Management, Expense Management, Sourcing & Transformation Management, and Insights and Intelligence. This platform will be available as an annual subscription to support telecom, network, IoT, and SaaS management needs for enterprise IT organizations.

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Calero Flexes PE Muscle in Acquiring TEM Stalwart Comview

Calero Logo

On December 29th, 2017, Calero Software acquired Comview, an experienced telecom expense management and call accounting software and services provider. Financial terms were not disclosed. From Amalgam’s perspective, this acquisition is important in demonstrating the plans of Calero under its new ownership, Riverside Partners, and in establishing Comview’s role in the Technology Expense Management market. With this acquisition, all Comview personnel other than Founder John Perri are expected to move to Calero. Calero has committed to supporting Comview’s solution for the immediate future. Comview is expected to run as “a Calero company” with independent development and operations in the short term.

Overall, Amalgam is bullish on this acquisition as it combines the strengths of a veteran TEM provider, Comview, with strong customer service and an integrated platform with the scale and breadth of Calero’s capabilities.

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The Enterprise Opportunity in Apple’s Slowdown

From Pixabay


On December 28th, Apple released a statement regarding the fact that it was planning to lower the battery replacement costs for Apple 6s and 7s from $79 to $29 as a followup to a December 20th statement made to Techcrunch in which Apple described how it was slowing down iPhone 6s and 7s. This piece provides guidance to enterprise IT, mobility, and procurement managers on what this issue is and how to take full advantage of this situation to improve your enterprise mobility environment.

Recommended Audience: CIO, Chief Procurement Officer, IT Procurement Directors and Managers, Mobility Directors and Managers, Telecom Directors and Managers, IT Service Desk Directors and Managers

Vendors Mentioned: Apple, Samsung, Huawei, Calero, DMI, DXC, Ezwim, G Squared Wireless, Honeywell, IBM, Intratem, MDSL, MOBI, Mobichord, MobilSense, Mobile Solutions, NetPlus, Network Control, One Source Communications, Peak-Ryzex, RadiusPoint, Stratix, Tangoe, vCom Solutions, Visage, Vox Mobile, Wireless Analytics

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