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5/15/2013
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Apptio Wants To Be 'Workday Of IT'

Apptio is pushing into Europe with its software that helps CIOs manage IT operations and monitor costs of IT services, backed by a $45 million round of venture funding.

Apptio, the firm that says it wants to be the "Workday for technology business management," has just secured extra investment to help it get it there.

Apptio offers cloud-based software it claims helps CIOs better understand the costs of the service they are delivering to their organizations (hence the "technology business management" phrase).

"We want to be the business application to help the CIO run their operations as efficiently as they can," Apptio CEO Sunny Gupta told InformationWeek during a visit to Europe to start building his firm's momentum in what he says is a key geography for the company going forward.

Apptio, formed nearly six years ago, named as its most prominent European customers the U.K. arm of JP Morgan Chase, British bank The Royal Bank of Scotland and another financial services firm, Switzerland's Swiss Re. The company said it's made sales to 29 Fortune 100 companies in the past three years, and in the U.S. lists Boeing, Facebook, Coca-Cola, Safeway, Target and Xerox as clients.

[ There's a new world order coming -- are you ready? Read When IT Doesn't Choose Applications. ]

Gupta is in London to promote that Apptio has just secured a new hit of investment capital in a $45 million Series E funding round -- an injection that brings the total amount raised by the company to $136 million. The firm said plans for the new capital include further investment in its eponymous core technology platform and expansion of its international presence. Specifically, that means a three-phase opening of offices in the German speaking (e.g., Germany, Austria, Switzerland) and Nordic markets in Europe, followed by Benelux, France and Asia, Gupta said. (The company has had a U.K. office for some time.)

Investors and customers are buying into Gupta's proposition that there's a key business system for every member of the C-suite except one: the chief information officer. So the head of HR can use Workday; the CFO has Hyperion or Oracle; the head of manufacturing has SAP; and the sales manager can use Salesforce.com. But there's no equivalent for the CIO to track the performance of tech in the organization.

Until, you guessed it: Apptio. For Gupta, "Every CIO, large or small, needs a business management system to understand the cost and communicate the value of IT, along with industry benchmarks to measure themselves against. So we help CIOs run their 'business,' IT, by means of gathering the cost and contribution of IT so as to better manage it, producing an accurate 'bill' of what IT costs the organization that can be reviewed on a regular basis." Up until now, he claimed, such analysis could only really be garnered via "Excel, expensive consultants or home-grown business intelligence."

Benchmarking is an important word in this definition. CIOs have been measuring their IT costs against their peers via services from firms like the Hackett Group or CEB for years. Gupta counters that what he is offering isn't straight benchmarking, but a "wider" process. "Benchmarking is part of what we do, yes. But what that process historically means is measuring your cost structure against other businesses more or less your size or in the same market. That's useful, but as we move to a more service-delivery paradigm, it's becoming more useful to help you baseline your own cost."

As examples of what customers are using such baselines for, Gupta said they are using data to ask questions like why $40 million SAP investments are actually showing only half of licenses ever being used, or to power highly granular drill-downs into tracking changing costs of storage and other IT service features, or allowing CIOs to demonstrate what internal storage is costing versus the same functionality from Amazon Web Services, and so on.

Analysts seem to think that there might be something here. Forrester Research, for example, in its "Market Overview: IT Financial Management Software" report thinks this new category of technology business management could be an $800 million software market by the end of 2013, spurred by "business users demanding greater IT cost transparency and financial analysis in order to understand the true cost of IT ... critical in enabling them to intelligently manage demand for IT services and participate in cost management decisions."

Apptio also announced it has formed a European arm of the CIO Technology Business Management discussion and best practice sharing forum it supports.

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