A few thoughts about the Telecom Expense Management market in 2012:
Managed Mobility Services Becomes a Viable Market Adjacency
Continued headwinds in the global economy and a user base hell-bent on bringing their own mobile devices to work (BYOD) will finally make MMS a viable process and IT service market for TEM providers. One big challenge for providers entering the market is choosing, or acquiring, an operations management platform (e.g. mobile device management software) that is scalable and highly automated. Another significant challenge is determining what level of partnership or investment to pursue related to logistics and support. Each promise to make or break an MMS business model and greatly influence service products brought to market.
M&A will continue to distract and intrigue the market
Recently, IBM acquired the Rivermine TEM business in the Emptoris acquisition. Tangoe followed with an acquisition of Profitline. Last week, WidePoint acquired Avalon Global Solutions. All of these market events occurred within a 2 week period… and there are more events in process. Finally, the market is entering into a consolidation phase. However, those companies looking to sell shouldn’t be too excited in terms of ‘revenue multiplier inflation’. Based on past and recent acquisitions, and conversations with interested buyers, the market is not likely to pay much more than 3 times forward revenue unless the underlying intellectual property is disruptive and/or the service model is differentiating.
The Gap Between the Haves and Have-Nots Will Widen
Although M&A will likely thin the number of competing pure-play TEM companies in the market, there are more and more competitors emerging everyday. Telecom expense management is emerging to be a more important consideration by end-users in Communications Outsourcing deals as TEM capabilities have become the business intelligence mechanism to prove the value of a communications outsourcing deal. It is more important than ever for TEM companies to invest in personnel and support capabilities related to building a robust indirect sales channel. The emergence of global outsourcers and global carriers into the TEM market will gradually remove the top end of the market, in terms of telecom spend and devices to be placed under 3rd party management, from the pipeline of many TEM providers. Those TEM companies without successful channel enablement programs will likely become part of the M&A wave as a distressed asset.
Give me a call if you’d like to discuss.
View Free, Relevant Gartner Research
Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.Read Free Gartner Research
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.