Apptio Advances IT Cost Management Tool

Startup emerges, claiming unique SaaS that itemizes storage - and other IT - costs

June 10, 2008

4 Min Read
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Every IT shop wants to save costs, including storage costs. But it's not always easy to figure out an effective strategy unless you know what you're already spending and how your plans could affect future payouts.

Enter Apptio, a Bellevue, Wash., startup that says it's got the key. Founded in 2007 and backed in part by entrepreneur and Netscape co-founder Marc Andreessen, Apptio has emerged from stealth with a modeling, analytics, and reporting package it claims offers "IT accountability." Offered as a software as a service (SaaS), Apptio's product itemizes the expenses associated with specific resources, such as storage, services, operations, networking, product capital, software, servers, support, and the like, as depicted in the screen shots below:

Figure 1: Source: Apptio

Figure 2: Source: Apptio

Apptio's SaaS offering has a few options and an annual subscription fee price model. Unfortunately, actual pricing won't be disclosed until the service is more widely rolled out over the next few months.In the meantime, Apptio's management insists the announcement is not premature. According to CEO Sunny Gupta (formerly of iConclude and Opsware), companies that have deployed the Apptio software include Finlay Enterprises, HomeStreet Bank, and Motricity. These are already seeing results, he says.

"Apptio's solutions gives us complete visibility into IT service costs, the ability to track actuals versus budget on a monthly basis, and will play a key role in helping me manage the business of our IT organization from here on out," said Jim Giantomenico, SVP and CIO at Finlay Fine Jewelry, in a prepared statement.

Apptio's service takes input on IT costs from a range of corporate sources, including manual entry, data within specified systems and servers (including Accounting's general ledger), or a small virtual appliance for data centers that Apptio will offer as part of the service. The data is pumped into common templates -- Apptio says it should take just a couple of hours to set things up. Cost, utilization, and operational metrics are then crunched, and a selection of views produced: IT pros can ask for an overall IT view, with specified resources broken out, or a line of business view, itemizing costs associated with specific parts of an organization.

If things pan out as planned, Apptio's service may prove especially helpful to storage managers. "Regarding storage, you could track costs associated with the type of device, its location, or capacity," says Gupta.

This kind of information could be extremely useful in planning storage costs, but managers will need to have the right input. Any storage data tracked in a spreadsheet, SRM tool, or asset management system could be included. Sadly, storage usage has often been left out of trendy management systems, and storage is a cipher when it comes to IT automation as well.Nonetheless, there is some competition. A range of suppliers, mostly those dubbed systems management software vendors such as BMC, CA, and IBM, have long offered chargeback software that tracks usage of IT resources and matches that to pricing data. Some smaller firms, like Onaro (bought by NetApp for a rumored $120 million early this year), have extended chargeback reporting to storage usage.

For Apptio, which garnered $7 million in funding from Greylock, Madrona Ventures, Andreessen, Ben Horowitz, Ignition Ventures, and Shasta Ventures earlier this year, the challenge will be to live up to its hype. "Its too soon to be definitive about them – as they’re still evolving the details of the product and launch," states Dennis Drogseth, VP at research house and consultancy Enterprise Management Associates, in an email. "At first look, I would say that it’s a very valuable capability – and that as an overarching concept it’s unique."

Another analyst claims not to have seen anything like Apptio's evolving offering. "Apptio is focusing on financial issues, not asset management, utilization, or chargeback," says Donna Scott, VP at Gartner. No company so far, she says, has been able to take input from a general ledger and spreadsheets and do simulation or modeling from the input. And that, she says, is the essential value Apptio proposes with its service: "It might be used for chargeback, but the point is to make better business decisions. You can't optimize cost structure with out knowing the costs."

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  • Apptio

  • BMC Software Inc. (NYSE: BMC)

  • CA Inc. (Nasdaq: CA)

  • Enterprise Management Associates

  • Gartner Inc.

  • Hewlett-Packard Co. (NYSE: HPQ)

  • IBM Corp. (NYSE: IBM)

  • Madrona Venture Group LLC

  • NetApp Inc. (Nasdaq: NTAP)

  • Onaro Inc.

  • Shasta Ventures0

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