Technology Business Management (TBM) software solution vendor Apptio announced its acquisition of ITFM competitor Digital Fuel, maker of IT Business Management (ITBM) software on February 2. According to Gartner’s estimates in its latest Market Guide for IT Financial Management, the newly combined market share by Apptio now makes up more than half of all sales to enterprise buyers of ITFM tools. In talking to our network, which spans buyers across all major ITFM/ TBM/ ITBM solutions, we hear a lot of concern about this consolidation in the market.
Acquisition of one software company by another is an everyday occurrence nowadays.
Vendors consolidate to increase market share and revenues, often capitalizing on opportunities to reduce operational and development expenses through the consolidation. And in a situation like this acquisition, where there is a good deal of overlap in the 2 technology solutions, buyers and users may rightfully predict the sunsetting of the acquired technology within 2-3 years.
And that is from where the concern emanates.
Implementing an enterprise software solution is never easy. Years and millions can be spent on implementation alone. Configuration can bring teams to their knees. ITFM tools must be mapped and hooked into corporate finance systems of record. They must accurately and repeatedly aggregate technology consumption data from the various and ever-changing data sources throughout the enterprise. And then there is cost model design, data validation and maintenance, and ongoing support from evermore scarce technical resources. It is far from easy, and rarely something a team wants to repeat any time soon.
And now, buyers of ITFM solutions are bracing themselves for going through the pains of implementation and configuration again … and not on their own terms.
We predict that some going through that pain will call ‘Uncle!’ and look instead to professional service providers who will do that forklift for them. Or they’ll consider a managed service offering that gets them up and running quickly, efficiently and without having to worry about the purchase, implementation, or ongoing maintenance ever again.
Managed services are more prolific now than ever.
Think how ubiquitous Amazon Web Services or ADP Payroll are. Apptio’s acquisition of Digital Fuel may be the tipping point for ITFM leaders to relieve themselves of that ongoing investment, risk, and worry, and move toward 3rd party assistance for their IT financial management or technology business management capabilities.