Wireless carriers have always been a fan of add-on fees and charges – it’s a tried-and-true revenue stream outside of their normal customer rates. But over the past several months, we are seeing the list and scope of these fees growing for enterprise customers. One example is Verizon’s “Economic Adjustment Charge.”
Every sector of the tech industry has its dinosaurs. In computing, it’s the mainframe. In software, it’s the perpetual license. And in connectivity, it’s the copper-based T1 line. What do all these things have in common? They’re still widely used by millions of businesses across the globe. And in the case of customers using AT&T’s T1 lines, that’s a bit of a problem.
No corner of enterprise spend is immune to inflation – including business wireless costs. Carriers like AT&T and Verizon have raised fees in recent months to head off inflationary pressures as well as “motivate” customers to switch to newer plans. But as the wireless carrier market becomes less competitive (it’s essentially a three-carrier marketplace), many enterprises are wondering how they can get a handle on rising wireless costs.
Managing telecom spend has always been difficult for enterprises. But as the pace of change in the telecom industry accelerates, the complexities that define telecom cost management grow in lockstep. We recently spoke with telecom sourcing executives from Gap, Inc. and Intuit to find out what’s top of mind for their organizations as 2022 approaches and how they’re working through the challenges and opportunities. Here are some key takeaways...
Our enterprise clients often ask how much weight to put on IT service level agreements when sourcing a new supplier or service. This is never an easy question to answer and largely depends on how business-critical the service is, or the goal of the SLA in question. Enterprise IT ecosystems are vast and the criticality of one IT vendor versus the next varies – a network provider or...
Reprioritization of IT spend has many business leaders setting new objectives for telecom cost reduction. That’s understandable given the proliferation of telecom overspend in the enterprise. NPI’s experience indicates a significant majority of business pay too much for wireless, wireline and network spend. For most, the savings opportunity is material – seven figures in some...
“Don’t tell them your budget” is a common prescription among sourcing professionals and a best practice for IT price negotiations. But how effective is it? That depends. If sourcing is engaged early, the purchase is well defined, and current market data is used to develop the budget, then delivering a purchase target to a supplier...
As the cloud war wages on and commoditized pricing persists, many enterprises wonder if it’s possible to negotiate a discount with Amazon Web Services beyond what the vendor publishes publicly. For some customers, the short answer is yes – an additional AWS discount is possible. While the numbers steadily evolve, recent data indicates AWS continues...
What do SD-WAN, 5G, and IoT have in common? Two things come to mind. First, there is a lot of hype surrounding these technologies. The second thing is unknown costs. Let’s start with the hype… If you are a VP of Infrastructure and you haven’t made the switch to SD-WAN, bought your first 5G Smartphone,...
There is a bit of art and science in IT purchase negotiations – and it’s important to understand the difference. The science of a deal comes from data about a vendor’s pricing, discounting and negotiation behavior in comparable deals – providing this information to IT buyers is NPI’s specialty. IT vendors are notorious for charging...
Telecom costs are notoriously difficult to manage – so difficult that, despite a growing number of telecom expense management solutions in the market, most enterprises don’t have the resources or expertise to adequately manage their spend and instead take an autopilot approach to telecom cost control. Across NPI’s client base of 500+ enterprises, our data...
Negotiating a new wireline carrier contract can easily take as long as six months. Why so long? Because it benefits the carrier. In this blog, we review scenarios that explain the critical importance of timing as you negotiate a new contract with your wireline carrier.
When it comes to enterprise video conferencing and collaboration, companies have more options than ever. While Cisco WebEx and Microsoft Skype for Business may still get the majority of mindshare based on tight integration with their embedded deployments within the enterprise, a growing number of companies are looking beyond these industry stalwarts to alternative solutions....
Have a Cisco purchase or renewal coming up? If so, there are a few things you should know before negotiation discussions to better understand and apply your position of leverage, and optimize the outcome of your purchase or renewal.
AT&T Mobility and Verizon Wireless have slowly been trying to wean enterprise customers away from subsidized devices (and offer a much lower cost of monthly service instead). But is this really a good deal for the enterprise customer?
There’s been a lot of big news coming out of Redmond lately. One announcement that’s flown under many enterprise customers’ radar is that Microsoft is ending Skype support for third-party audio.
Telecom expense management provider Global Sourcing Group (GSG) recently rebranded itself to Sakon. Sakon is also the name of the company’s new expense management portal. Sakon is already a market leader in delivering expense management solutions for fixed and mobile communications. The established solutions - WirelineManager™ and MobileManager™ - are now supplemented by the next generation...
Recently, a change was made to Verizon’s device upgrade program – one that could substantially impact enterprise clients. Although most enterprise agreements have included incentives that require a 24-month subscription, as a common practice over the past few years Verizon has allowed many enterprise customers to upgrade their device after 20 months (matching other cellular...
More enterprises are migrating their corporate data center(s) to external co-location facilities. One of the many challenges they face is navigating disparate and confusing pricing models. Some providers only charge for power and network while others charge for power, space and network. Some charge different rates for cooling power versus cabinet power and all charge...
The FCC voted to roll back Net Neutrality regulations on December 14th, 2017. Much of the discussion around Net Neutrality has focused on the potential impact to consumers. For example, a customer getting their internet from Google Fiber may find their access to Yahoo for searching is either slower or that they need to pay...
The global TEM market is positioned to grow 14.2% over the next decade and reach $5.62 billion by 2025. Companies are struggling to manage telecom expenses well, and they need help. Here are the two questions I hear most often from executives tasked with reducing telecom costs...
When MPLS was introduced as a replacement to Frame Relay in the late 1990s, it was deployed in much the same way. Customer Edge (CE) routers were connected to Provider Edge (PE) routers with a fixed bandwidth access line and a fixed bandwidth port speed that generally matched the access line. The only variable was...
NPI has been asking for and predicting the coming of postalized ethernet pricing since early 2015. We are now beginning to see it in the marketplace. What is postalized pricing? In telecom speak, to “postalize” means to structure prices so they are not distance sensitive. For example, an enterprise that has more than 100 domestic...
IT and telecom suppliers like to keep the details behind pricing as opaque as possible. The more they can bundle, the less the customer can compare pricing to competitors. That helps the vendor at selection time, but it’s even more beneficial down the road. Take the following example – an actual quote. It includes 20,000...
I’m not a Wall Street expert, but I can't imagine that there is anything good about being booted from the S&P DOW Jones industrial average. Yet this is exactly what happened to AT&T on March 6th. The S&P DOW Jones Indices, a subsidiary of McGraw Hill Financial, announced that it would replace AT&T with Apple...
According to a recent report from the Yankee Group, the growth of the BYOD is slowing and may have already peaked. The percentage of enterprises with 1,000+ employees that allow BYOD topped out at 81 percent in Q2 2012 and has steadily declined since. The economics of BYOD have also shifted since 2012, especially those...
If you’re not paying attention to the shake-up in the telecom industry, it’s time to tune in. Here are the highlights: Japan's Softbank wants to buy T-Mobile and roll it into Sprint; AT&T is buying Direct TV, while Comcast and Time Warner Cable want to merge; Level(3) just announced its bid to buy TW Telecom;...
On January 6, AT&T announced a new way for eligible 4G customers to enjoy mobile content and apps over their wireless network without impacting their monthly wireless data plan. In many ways, the program is the equivalent of toll-free dialing for the subscriber’s data plan. Content or application providers that are willing to "sponsor" their...
When T-Mobile decided to bet the farm on its “un-carrier” strategy, critics wondered if it was “too little, too late” to turn around the wireless giant’s declining business. Early this month, the critics got their answer. By all accounts, T-Mobile is on a tear. On November 5, the mobile provider reported it added 648,000 net...