Tangoe and Traq Wireless merger portends consolidation among TEM vendors

Wireline and wireless TEM vendors are coming together

The telecom expense management industry is set for contraction as wireline and wireless TEM vendors look to merge and establish new partnerships. For enterprises, the consolidation efforts could simplify how they buy and deploy products for keeping telecom costs under control.

One of the first TEM mergers, announced Thursday, is between Tangoe and Traq Wireless. The companies say they expect to be fully integrated within a year; the combined company will go by the name Tangoe.

Tangoe today sells a wireline TEM solution that lets enterprise customers -- including HP, Comcast and McKesson -- monitor, analyze and control a range of TEM processes from a single application.

Traq offers its Mobile Lifecycle Management system, which is designed to let customers better manage wireless equipment and services. Some of the company’s customers include FedEx Freight and Saftey-Kleen.

The merger of Tangoe and Traq points to an emerging trend in the TEM industry for vendors with wireline and wireless expertise to join forces. Last week, Rivermine and BBR Wireless Management announced a partnership in which Rivermine will resell BBR’s wireless TEM platform.

According to analysts, more mergers, acquisitions and partnerships are on the horizon as enterprises grapple with the high cost of managing wireless telecom expenses.

“Wireless expenses cost 10 times more to manage compared to wireline expenses,” says Joe Basili, a research director at Aberdeen Group.

The research firm recently put out a report on the cost of managing wireless. It found 80% of respondents are planning to increase their deployments of wireless devices -- which means management costs will continue to rise, Basili says.

As more businesses look to invest in TEM solutions, they’re going to want to work with vendors that can handle all of their telecom needs, not just wireline.

The benefit of wireline/wireless TEM mergers for customers is they only have to deal with one company, one interface and one set of reports, says Lisa Pierce, a vice president at Forrester Research. “A customer will be able to look up activity on one employee and see all of their wireless and traditional voice calls on a single report.”

“Enterprises understand the benefits of having solutions that are integrated, and 70% plan to have solutions that allow them to integrate management of their wireless and wireline expenses,” Basili adds.

Another reason for the anticipated increase in merger and acquisition activity is that wireless is where the growth is in the TEM market, says Phil Redman, a vice president at research firm Gartner Group.

“There is very little growth in the wireline [TEM] business, all of the growth is coming from wireless,” Redman says. Wireline-only TEM vendors “that do not have a solid partnership, acquisition or merger with a wireless [TEM] player will not be around in a few years.”

Wireless TEM vendors that might be acquisition or partnership targets include Integrated Mobile, mindWireless and Movero Technology, Redman says. Meanwhile, wireline TEM players that need strong wireless solutions include Symphony Service and Invoice Insight, he says.

Redman adds that Rivermine customers should be cautious about its partnership with BBR. He recommends customers who are considering adding BBR’s wireless TEM platform should ask Rivermine how much it is spending on integrating BBR’s products with its own platform, and if the companies are sharing code. If the dollar investment is small and they are not sharing code, then customers shouldn’t expect a deep integration, Redman says.

As wireline and wireless companies pair off, those that remain solo can more clearly see who may be left to court.

Wireless TEM vendor MobilSense Technologies “has been competing for the mindshare and alliances with the same pool of TEM vendors” as Traq, says Dave Stevens, president and CEO of MobilSense. “We've already been approached by one former Traq TEM partner and expect to see many more over the coming weeks as they determine they can't partner with a company they now are competing with.”

Learn more about this topic

Rivermine, BBR team to simplify wireless, wireline offerings03/07/07The high cost of managing wireless02/28/07TEM industry group launches; it's the second in six months02/28/0710 telecom expense management companies to watch11/27/06
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