apptio

Businessmodel of Apptio

Customer Segments

Apptio provides a range of solutions to commercial and institutional customers on a software-as-a-service basis. The Company’s services target companies across multiple business sectors, including the following:

  • Financial Services, including banks, insurance providers, and other financial services companies;
  • Professional Services, including law firms, architectural firms, and auditors;
  • Technology, comprising various technology and software development companies;
  • Energy, comprising energy producers and energy transmission companies;
  • Consumer Goods and Retail, comprising various retail chains, consumer goods producers, and foodservice chains;
  • Manufacturing, comprising manufacturers across multiple industries, notably the metals sector;
  • Healthcare, comprising health care providers, pharmaceutical companies, and life sciences companies;
  • Media and Telecommunications, comprising cable television companies, media houses, and telecommunications providers;
  • Transportation and Logistics, comprising automotive companies, freight services providers, and transportation businesses; and
  • Government, comprising various state and federal government agencies. Apptio has a growing customer base, which it claims includes more than 40% of the FORTUNE 100. The Company lists a number of customers on its website, including high-profile names such as United States Steel, Starbucks, Boeing, Cisco, Bank of America, Microsoft, AT&T, and JP Morgan.

Apptio serves an international client base. Its principal market is its native US, and the rest of North America. It also serves clients across Europe and Asia Pacific.

Value Propositions

Apptio provides value to its clients in the following ways:

  • Its reputation and industry standing, with the Company established as a reliable and efficient provider of various software-based services, with the Company including among its customers a number of high-profile companies across multiple industries, including Microsoft, Boeing, and Starbucks;
  • Its international reach, with the Company serving a broad range of customers from around the world, notably across North America, Asia Pacific, and Europe;
  • Its specialist personnel and industry expertise, with the Company employing specialist personnel and experts in IT business processes, led by a team of experienced industry executives;
  • Its technologies and solutions, with the Company offering unique and innovative solutions backed by purpose-built proprietary technologies that set its offerings apart from those of its competitors; and
  • Its data set, with the Company utilising an aggregated data set of customer IT spend across a spectrum of industries, geographies, and amount of spend in order to provide accurate and effective solutions to its clients. ### Channels

Apptio operates a website at www.apptio.com, through which it provides information on its various solutions, target industries, and customers. The Company does not operate an online sales channel; however, it does provide a detailed online contact form through which customers are able to express an interest in the Company’s services via the Apptio website. Once customers have subscribed to the Company’s platform, they are able to access the platform directly from their desktop browser.

Apptio primarily sells its solutions and services through an in-house direct sales force that is organised by geographic region, with the Company operating offices across North America, Europe, and Asia Pacific. Customers are able to subscribe to one or more of the Company’s applications, and within those applications they may choose to subscribe to all or a portion of the respective application’s capabilities, which are segmented into modules. To customers that do not initially implement all of the Company’s applications, Apptio’s sales personnel seeks to sell additional applications and modules over time.

Additionally, Apptio collaborates with various channel partners, notably a network of resellers that extend the Company’s marketing and sales reach.

Customer Relationships

Despite having an online platform, Apptio does not sell its solutions to customers on a self-service basis. The Company, however, provides a contact from for customers to express an interest in the Apptio platform without interacting directly with members of the Apptio sales force. One subscribed, the Company’s platform operates on a self-service basis, with customers able to manage their accounts, access resources, and utilise Apptio tools independently.

Apptio’s dedicated sales personnel consult directly with potential clients in order to assess their individual needs and circumstances and provide them with the most appropriate solutions. The Company works closely with customers with a view to establishing long-term relationship and recurring business.

Apptio provides ongoing technical support to its customers. This includes various online resources available through its website and online portal, including webinars, case studies, white papers, and analyst reports. Alternatively, clients can contact support staff over the phone or via an online contact form to receive personalised assistance. Additionally, Apptio lists its upcoming events and conferences, which enables clients to interact with the Company’s employees in person.

Customers can also interact directly with Apptio through its various social media accounts, including with Twitter, LinkedIn, and Google+.

Key Activities

Apptio is a US-based provider of cloud-based technology business management products on a software-as-a-service basis. Its products and solutions are designed to assist clients in managing their IT systems. Apptio offers a range of cloud applications that are built around its online platform.

This includes Apptio Cost Transparency, which offers features, such as manage cost and investment across user’s application portfolio; Apptio IT Planning, which helps companies manage annual budget, forecast and variance tracking; Apptio IT Benchmarking, which offers various supplements services in conjunction with Apptio Cost Transparency; Apptio Business Insights, which correlates IT infrastructure and application data; and Apptio Bill of IT, which automates the creation and delivery of invoices for IT services.

Key Partners

Apptio works in collaboration with a number of companies and organisation throughout the development and implementation of its services. These partners can be categorised as:

  • Supplier and vendor Partners, comprising suppliers of services, tools, and hardware that are utilised across the Company’s enterprise and network of offices in support of its core services and operations;
  • Technology Partners, comprising a range of technology companies, software developers, and IT services vendors that facilitate the Company’s ability to integrate with and leverage data from a variety of IT systems and ensure its provision of quality and reliable services; and
  • Strategic and Alliance Partners, comprising a range of professional service providers, technology companies, and IT services companies that provide advisory, configuration, implementation, and ongoing management services to the Company. Apptio includes a number of high-profile companies from around the world among its partners. This includes KPMG, Telstra, Microsoft, Oracle, Deloitte, and SAP.

Key Resources

Apptio’s key resources are its intellectual properties and technologies, its online platform and software solutions, its IT and communications infrastructure, its sales and distribution channels, its partnerships, and its personnel.

Apptio’s ongoing success is dependent, in part, on its ability to protect its proprietary technology. As of 30th June 2016, the Company had patents issued in the US, as well as 15 patent applications pending for examination in the US. Searches of records published by the US Patent and Trademark Office identified several patent applications filed in Apptio’s name, including applications entitled ‘Version control for resource allocation modeling’, ‘Visualizing the flow of resources in an allocation model’ and ‘Global dictionaries using universal primitives’.

Apptio also owns and or leases a number of physical properties, notably its network of offices across North America, Europe, and Asia Pacific. This includes locations in Bellevue, Morrisville, New York, Chicago, Denver, London, Dusseldorf, Copenhagen, Rotterdam, Paris, Sydney, and Melbourne.

Cost Structure

Apptio incurs costs in relation to the development of its technologies and software products, the development and maintenance of its online platform, the maintenance of its IT and communications infrastructure, the operations of its sales and marketing channels, the management of its partnerships, and the retention of its personnel.

In 2015 Apptio accrued total operating expenses of $119.65 million, the largest portion of which related to its marketing and sales costs, which totalled $71.34 million for the year. The Company’s research and development costs amounted to $30.55, and its general and administrative costs totalled $17.76 million.

Revenue Streams

Apptio generates revenue through the development and sale of various software-as-a-service solutions to commercial and institutional clients. The Company’s solutions are provided on a subscription basis, with subscription fees based on spend managed by the Company’s applications and the number of applications or capabilities for which the customer has subscribed. The Company also derives a smaller portion of its revenue from the provision of various professional services, such as consulting.

In 2015 Apptio generated $129.25 in annual revenue, up on the $106.62 million recorded by the Company in 2014. The majority of this revenue, around $99.92 million, was attributed to the Company’s collection of subscription fees. Revenue attributed to the Company’s professional services amounted to $29.33 million.

Written on October 25, 2017