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Apptio is Improving Offerings

Posted on Friday, Oct 31st 2014

According to Gartner, the worldwide IT operations management software revenue grew 4.8% over the year to $18 billion in 2012. The market was dominated by five key vendors, IBM, CA Technologies, BMC Software, Microsoft, and HP that accounted for 55% of the market share. But the smaller vendors are catching up. Overall the top five vendors reported a modest 0.6% growth over the year while all the other vendors accounted for a growth of 10% over the year.

Apptio’s Offerings
Bellevue, Washington-based Apptio was founded in 2007 by Sunny Gupta. During a meeting with CIOs at Goldman Sachs, Sunny realized that while there existed a finance system for the CFO, a CRM system for the sales team, and marketing systems for the CMO, there was no such system for the CIO to manage the business of technology. There was a need to create a platform that helped the IT function benchmark themselves and make business decisions while being able to provide a bill of IT to the organization. This was what led to Apptio.

Today, Apptio’s SaaS-based tools provide CIOs with the ability to identify IT service costs and use these estimates for budgeting and forecasting. Their key products include an Apptio TBM Suite and a Platform. The cloud-based TBM Suite is a complete suite of applications for IT leaders that helps in financial management of the IT function. Using the TBM suite, CIOs are able to optimize costs and provide an efficient resource planning. The SaaS-based Apptio Platform offers on-demand access to Apptio’s suite of offerings through a secure and scalable environment.

Cloud Express, a free service, is aimed at developers and DevOps managers who are using cloud vendors like AWS, Windows Azure, and Rackspace. Cloud Express uses information related to public cloud cost and usage to help IT managers of an organization optimize spending on these clouds. CIOs can use Cloud Express for price comparison among different vendors and further use the information obtained to negotiate better with their vendors.

Recently, Apptio launched Apptio IT Planning Foundation, which is an enterprise-class SaaS application designed for creating annual budgets, forecasts, and variance tracking.

Apptio’s Financials
Apptio earns revenues by charging their customers an annual license fee based on IT spend under management. While the company initially focused on smaller organizations, they have scaled significantly since then. Today they have more than 550 employees catering to 175 global customers. Their customer list includes names like Bank of America, Cisco, Microsoft, Starbucks, and JPMorgan Chase.

Apptio does not disclose its financials, but an earlier estimate pegged them at $72 million in revenues in 2011. Revenues are expected to have grown 85% in 2012.

Apptio has been venture funded so far with $136 million in funding received from investors including T. Rowe Price, Shasta Ventures, The Hillman Companies, Madrona Venture Group, Greylock Partners, Janus, 137 Ventures, Andreessen Horowitz, and Cisco. Their last round of venture funding was held in May 2013 when they raised $45 million at a valuation of $600 million. As part of their growth, Apptio is planning to expand into new verticals and geographies, including the markets of Europe and Asia.

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