Businessmodel of Tangoe

Customer Segments

Tangoe has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at firms of all industries and sizes.

Value Proposition

Tangoe offers three primary value propositions: accessibility, convenience, and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired numerous firms since its founding, including ttMobiles, Anomalous Networks, ProfitLine, InterNoded, Information Strategies Group, and Traq Wireless. This strategy has enabled it to significantly expand its capabilities and diversify its portfolio.

The company offers convenience by making life simpler for clients. It offers an end-to-end solution for connection lifecycle management, with specific features including sourcing and planning, procurement and provisioning, usage and inventory management, mobile device management, real-time telecommunications expense management, invoice payment and processing, expense accounting and  allocation, and asset decommissioning and disposal.

Tangoe also creates convenience by making it easy for clients to implement and adopt its solution. Its software interfaces directly with vendor systems, enabling customers to rapidly transfer order and billing information to and from their vendors without time-consuming and expensive customizations.

The company has established a strong brand due to its success. It serves over 900 companies, including 49% of Fortune 500 firms. It claims to have over four times the revenues and six times the IT spend under management ($35 billion) than its closest competitor in the Telecom Expense Management (TEM) industry. It also has the following:

• 5 million devices managed globally
• 3,920+ carrier billing systems supported worldwide
• 2 million invoices processed per month
• 72,000 mobile fulfillment orders per month
• 37,000 help desk transactions per month
• 400 contracts negotiated annually
• A 90% customer satisfaction rate ### Channels

Tangoe’s main channel is its direct sales team. It also sells its offerings through value-added resellers, systems integrators, telecommunications providers, communications alliances, consulting firms, technology service providers, business process outsourcers, and independent software providers.

The company promotes its offerings through its website, social media pages, e-mail marketing, direct marketing, online marketing, webcasts, and participation in industry events such as trade shows, forums, and conferences.

Customer Relationships

Tangoe’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services – The company provides customer service in 14 languages on a 24x7x365 basis.

Consulting Services – The company has a team of experienced strategic consultants that helps clients evaluate, plan, obtain, and implement technology and associated services. Specific services include:

• Strategic Sourcing –Consultants offer information and Communications Technology (ICT) services benchmarking, negotiation, and procurement services
• Strategy Assessment, Planning, and Policy Development – Consultants help clients align corporate priorities and ICT services investments to exceed or meet strategic objectives
• Implementation and Transition Support – Consultants offer ICT services change management and support to ensure efficient migration with limited disruption The consultants provide clients with tools, templates, processes, and methodologies that were proven to be successful in past projects.

Despite this orientation, there is a self-service component. The company’s website features a section called “Resource Materials” that includes white papers, research reports, solution sheets, eBooks, and videos.

The site also provides access to live product demos. There is also a community element in the form of Tangoe User Group (TUG), a forum that enables clients to interact with each other and industry experts in order to exchange knowledge and share ideas.

Key Activities

Tangoe’s business model entails designing and developing software and delivering related services to its customers.

Key Partners

Tangoe’s key partners are the various types of distributors it works with to sell its products in order to extend its reach. It also maintains strategic alliances with various types of firms in order to provide enhanced solutions for its customers. These partnerships fall into the following categories:

• Global Strategic Carriers – Partners include Atos, Cognizant, Fujitsu, HP, SAP, IBM, and Wipro
• Global Carrier Partners – Partners include AT&T, BT, Orange, T-Mobile, and Verizon
• Global Technology Partners – Partners include Airwatch, Cisco, LG, Google, MobileIron, MaaS360, Samsung Specific types of partners include telecom carriers, systems integrators, and technology and mobile equipment manufacturers. Tangoe’s partners are located in North America, EMEA (Europe/Middle East/Africa), Latin America, and Asia-Pacific.

Key Resources

Tangoe’s main resources are its human resources, who include the engineers that design and develop its software, the sales employees that promote it, and the consultants that provide advisory services.

It also maintains important physical resources, namely the eleven data centers it operates in Secaucus, New Jersey; the Netherlands; Austin, Texas; Montreal, Canada; Slough and London, United Kingdom; Sydney, Australia; Dublin, Ireland; Billerica, Massachusetts; and Nashville, Tennessee.

It places a strong emphasis on intellectual property, with 30 issued and 20 pending patents. Lastly, as a startup it has relied on funding from investors, raising $26 million as of September 2008.

Cost Structure

Tangoe has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is cost of revenue, a variable expense.

Other major drivers are in the areas of sales/marketing, administration, and research/development, all fixed costs.

Revenue Streams

Tangoe has three revenue streams:

• Fees charged for recurring technology and services
• Strategic consulting fees
• Software license fees