Yesterday, VMware announced its acquisition of Digital Fuel, and I wanted to offer some insight based on Apptio’s experience in the market and the direction we believe the market will follow. Digital Fuel has been around for a long time and was in the midst of making the transition from legacy service level management (SLM) to IT Financial Management (which we view as a subset of Technology Business Management). The broader TBM category is certainly becoming the strategic control point for CIOs to run the business of technology.

Apptio is experiencing triple digit growth rates  with large scale enterprise customers across all verticals adopting our Technology Business Management (TBM) Suite as the strategic system to run the business & decisions for IT.  Even though Apptio has been approached by several large vendors with strategic interest in the space, we continue to have conviction that  Apptio will be an independent stand-alone company as it is becoming the de-facto market leader  due to our vision, next generation purpose built TBM suite, prescriptive guidance to CIOs and maniacal focus on creating wildly successful customers.

Also, since the very beginning, we’ve recognized just how important independence is to our customers  -- which is why we’ve kept our focus on scaling our business so we can remain independent for the long-term.

So why is independence so important for the TBM market? For the same reason you don’t want investment bankers regulating their own traders. When a major systems vendor becomes the gatekeeper for evaluating the ROI of their own product, you have to wonder whether their interests are truly aligned with your own. Thus, buying your cost and IT planning software from the same vendor who is trying to sell you more virtualization licenses would appear to perpetuate this conflict.

Also, we recently held a CIO TBM Council attended by 150 IT leaders, including 50 CIO’s from Fortune 1000 companies.   It is our firm belief that IT is under a major services transformation.  CIOs are looking to run IT as a service and understanding cost, value & quality of service metrics is critical in that transformation journey.  Virtualized environments are a small subset of the Cloud Transformation, which is a very small subset of Services transformation agenda.   Apptio is focused on all segments.   TBM category is not only about the cloud;  It is much broader than that.  Apptio will continue to deepen it's partnership with VMware  as one of the virtualization/cloud partners in this journey.   We also need to accurately represent other heterogeneous platforms including Amazon, Citrix, Microsoft, Rackspace etc.

That said, we think this acquisition represents a tremendous validation for the emerging TBM market. Just like the technology transformation of virtualization & the cloud, we believe TBM represents even a bigger opportunity for Apptio to drive the business transformation in IT.   These are 2 separate disciplines, best served by 2 independent companies.