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TEM companies in trouble

By temguy_Toronto ·
Anyone else think that the big TEM companies are getting into trouble?

My quick industry scan sees a few disturbing trends.
Quickcomm and TnT got sold to Verizon for peanuts. Rivermine got bought out by Emptoris seemingly just to get over the $100M IPO hump, and Tangoe is so broke it's looking to raise $75M from an IPO to 'pay down dept'.

I'm thinking the Venture capital guys who have been funding the TEM companies to date have been hurt by the economy and are trying desperately to pull the ripcord before it gets any worse.

Quickcomm ran out of cash, and with Verizon being their biggest customer, and keeping the light on, it makes sense to sell out. But for a reported $7M??? How much dept did they have? (a 'global leader in TEM' selling for just $7M, how global can you be for just $7M?????)

Tangoe reports that they have never made a profit, and that the $75M they need to pay down debt makes the IPO look more like an investor bail-out. (a global leader in TEM, that has the same fiscal policy as the US federal government)

Rivermine had some of the lowest customer satisfaction scores according to an AOTMP survey. Any wonder IBM dumped them as a preferred partner, and is scrambling to replace them.But if you believe the marketing, a global leader in TEM, and TEM marketing spending. ~probably the only reason Gartner is still publishing them as a 'quadrant leader'. Gartner is for profit research, any surprise Rivermine still ranks well in their books (their accounting books)

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Tangoe in Debt

by tempert In reply to TEM companies in trouble

Thank you for posting this. I've been following this as well. It seems Tangoe has a knack for destroying companies. If you follow their track record you will note most of the companies they purchased were profitable. However, due to their lets call it "management style" of basically just being sales oriented and M&A vs actually developing technology (which they just offshore once they acquire it) they run those profits into the ground. I can attest that main this is due to them driving out top tech folk via benefit cuts (which is the same thing as giving folks a pay cut) in the companies they acquire and trying to offshore operations/development. The company is basically a giant ponzi scheme. I've often been quoted as calling their CEO the madoff of the TEM industry. The problem really is in the way he thinks you "grow a business" by utilizing generic business frameworks vs tradition work. Then hoping to cash out on an IPO due to the client list. Clients can't leave because they are tied into contracts. This is one of the problems of the ARR model. So by the time the clients can bow out of their contracts it's 2-3 years later and they've already signed new clients to take their place, etc.. Anyway, the whole thing is just capitalism at it's worst. These are the type of folks that have destroyed the economy and should be behind bars if you ask me.

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