2024 IT Trends and Savings Recommendations

15 Money-Saving Tips for IT

Managing $34B in IT spending will teach you a thing or two about how precious IT dollars are being invested, where overspending happens the most, and how prices are shifting in the market. In our third annual edition of the IT spending and savings trends report, Tangoe’s team of 60 technology consultants share their biggest takeaways from the past 12 months. These lessons learned are gleaned from hundreds of digital transformation and cost-reduction projects with clients across every industry. Herein, you’ll learn how to use our IT insights to strike the right deal, save money, make smarter purchasing decisions, and prepare for what’s coming next.

Introduction: The Year of Technology Expense Management

In 2024, technology cost governance will become an increasingly urgent concern amid cloud-flation and the unwavering demand for digital innovation despite slow-moving IT budgets. Over the next 12 months, executives must be attentive to IT’s fiduciary responsibilities, ensuring companies are gaining adequate business value that covers the cost of new investments in AI, cloud, mobile, and telecom technologies. That means efficiently monitoring financial returns, but also using all purchased resources and eliminating any overspending to make innovation financially sustainable for the future.

And the situation has never been more urgent.

As such, technology expense management will rise in the IT priority list, competing with initiatives like cybersecurity and systems performance. But what is technology expense management? It’s both a practice as well as a solution offering that gives CIOs, CFOs, and procurement leaders a modern and more effective way to manage their portfolio of technology assets, expenses, and services.

As the leading provider in this industry, every year Tangoe’s consultants engage in digital transformation and cost-reduction projects, evaluating billions of dollars in IT spending across hundreds of providers in 200 countries. Here are our top tips from the past 12 months.

Tips from 60 Technology Consultants

Keep Reading

Opt In*
This field is for validation purposes and should be left unchanged.
Chapter 01

Cloud: Spending, Savings, and Pricing Trends

The cloud remains the number-one source of savings for companies and should be the first point of focus for any cost-optimization effort. Studies report 30% of cloud assets go to waste. According to our own data, Tangoe clients saved up to 40% in 2023 with cloud expense management solutions, and there’s room to go higher. Rising volumes in cloud spend means small reductions in cost will generate significant payouts in 2024 with immediate results recognized through rightsizing on-demand resources. Plus, recent changes in market dynamics are creating more savings opportunities for cloud consumers. Here’s what you need to know.

AWS is Being Fiercely Challenged: Shop Around to Save on IaaS

Amazon Web Services (AWS) has been the market leader since public cloud infrastructure as a service (IaaS) first hit the market. But now its market domination is being challenged by other well-recognized providers including Microsoft Azure, Google Cloud Platform, and Oracle Cloud. In April 2023, AWS reported its slowest revenue growth in at least a decade, signaling a shift in the market. Gartner reported Google Cloud saw the highest growth rate of the top five IaaS vendors, growing 41% which outpaced AWS at 36% growth. Competition is heating up with compelling offerings at competitive prices, making AWS no longer the default choice.

When diversification or switching providers are out
of reach, optimizing the IaaS service you have is still considered low-hanging fruit for conserving costs and making full use of the resources you already pay for. For example, AI-powered IaaS optimization engines, like Tangoe’s, make it easy to gain visibility into multi- cloud environments, taking control of underutilized infrastructure and leveraging discounts and other features (Reserved Instances, Savings Plans, and service pausing) to reduce expenses.

Infrastructure services are typically under the ownership of the IT team, simplifying optimization. That’s very different from SaaS and Shadow IT challenges with distributed owners that make it more difficult to rein in spending. With IaaS, Tangoe clients get visibility and cost-saving recommendations within 24-48 hours, and many IaaS configurations can be automatically adjusted for faster time-to-savings.

RECOMMENDATIONS:

Competition is heating up in the cloud infrastructure market, which means now is the time for companies to shop their options and cut costs by diversifying or switching providers. Even if you want to just optimize the infrastructure you already have, automation makes it easy to pinpoint waste and adjust configuration settings, so it’s fast and simple to capitalize on savings opportunities.

40%

Clients cut costs by 40%
with Tangoe Solutions

30%

of cloud assets go
to waste

AI & GenAI: The New Root Cause of Cloud Spending Problems

Investments in AI and Generative AI are triggering more cloud spending problems and higher Shadow IT costs. The problem will only get worse in 2024 as nearly 50% of companies will invest in GenAI’s over the next 12-18 months. AI’s heavy reliance on the cloud’s storage and computing powers results in hidden IaaS and SaaS costs that often go unforeseen and unnoticed until invoices hit. AI can be costly because it devours cloud resources. With these costly side effects, every investor must carefully calculate how much money supporting infrastructure will draw from their AI budget. Thus, AI is becoming an impetus for controls and FinOps strategies that put a framework and ongoing process around cloud cost governance.
Here are some resources for a deeper dive:
Whether you’re running workloads in private, public, or hybrid clouds, Tangoe can help evaluate your approach, optimizing your resources to ensure AI-based innovation is financially sustainable for the foreseeable future. Learn more about Tangoe One Cloud for IaaS and Tangoe One Cloud for SaaS.

RECOMMENDATIONS:

If you’re opening the tap on GenAI or investing in AI platforms, consider the known and potentially unknown impact on your cloud expenditures. Assume your cloud costs will rise and combat cloud-flation using FinOps strategies. Be proactive in governing both infrastructure and Shadow IT as well as public, private, and hybrid cloud costs. Discovery tools that unveil usage are essential, particularly as new GenAI tools hit the market in 2024.

Choice Overload: AI Now Required for Full Cloud Optimization

Can you cross-compare 480,000 options to pinpoint the best pricing model for your cloud infrastructure service? Today, there are hundreds of thousands of SKUs for a single hour or partial hour of AWS EC2 services and over 1 million ways to purchase one server from AWS. Options from Google Cloud Platform and Microsoft Azure only thicken the haze. Pricing and discounting can be overwhelming due to a lack of standardization across providers and the millions of possibilities to cross compare.

And the options keep on coming – from AWS as well as other providers.

With the complexity of IaaS offerings in place now, spreadsheets and manual processes are no longer the right tools to lead IT purchasing decisions, knowing when to exchange discounts for long-term commitments. As cloud service providers continue to roll out more services and pricing models in 2024, AI is the only way to cut through the overwhelming number of choices. Diversity and model optionality are positive news for consumers. However, this complexity now requires advanced analytics and pricing models to simulate scenarios and make sense of the mountain of possibilities.

Tangoe’s AI engine instantly compares more than 1 million AWS pricing schemas showing you which on-demand service SKU will save you the most money. Plus, it’s a multi-cloud solution, so advanced analytics work across other providers too like Azure and Google Cloud Platform. Learn how to use AI to hyper-automate cloud cost optimization.

AI-powered cloud optimization programs are 53% more likely to report cost savings of greater than 20%. Meanwhile, those NOT using AI save less than 10%. Read the full research report.

RECOMMENDATIONS:

Adopt AI to maximize cloud optimization. Anyone not using AI to evaluate all their cloud infrastructure options isn’t exploiting all the service discounting and configuration possibilities. You need AI – not humans with spreadsheets – to run all the what-if scenarios effectively.

>20%
Cost savings using
AI-powered cloud optimization programs

Cost savings NOT
using AI

Cloud Pricing Trends: “Cloud-Flation” Continues

Over the past 12 months, we’ve seen SaaS and IaaS prices go up. Providers are hiking prices to maintain profit margins and combat supply-side inflation. For two years in a row now we’ve seen consistent currents in cloud-flation, so it will likely be a hard trend to shake in 2024.
There are ways to proactively address rising cloud prices. Get 3 ways to avoid sticker shock in the season of cloud-flation.

Beware of Carrier Offers: Shop and Save on Direct Cloud Connections

Tangoe clients are buying more direct cloud connectivity (also known as direct cloud interconnections or cloud secure gateway connections). These services use a private dedicated network to connect to the cloud. Tangoe data shows a vast difference in the price paid when comparing RFP-procured services versus those who simply accepted their carrier’s service offer.

For instance, clients who engaged Tangoe’s professional negotiation artists to land the best deal found the price difference to be as high as 6X, 8X, and 10X particularly as they moved into services with high bandwidth (1,000 to 10,000 Mbps) for more reliability. One manufacturing client saved over 70% on the cost of their cloud connections. This is a key source of savings in 2024.

Chapter 02

Mobile & IoT: Spending, Savings, and Pricing Trends

Mobile devices are how business gets done in today’s remote-work and post-pandemic world. Smartphones, laptops, and IoT devices are consuming more of the IT budget and more of the IT team’s time — one study shows as much as 34% of their time. For these reasons, mobility remains a key source of wasted time but also overspending. Tangoe’s data shows companies can save 30% on their mobility costs and research from Vanson Bourne says companies stand to gain 52% in productivity with the right approach to mobile device management. In handling 14 million devices for our clients, Tangoe has its finger on the pulse of this market. Here’s where we see the biggest opportunities for clients.

52%

Gain in productivity with the
right approach to mobile
device management

Who is Entitled to a Phone? Mobile Repossessions are the New Source of Savings

Mobile phones are no longer being handed out like holiday candy. In fact, more companies are taking back mobile phones and sometimes VoIP “softphone” licenses from employees to avoid costs. Companies are dialing back overprovisioning, especially in instances where employees are required to return to the office. Phones are a key source of bloat, and “repos” offer savings to recoup on panic purchases made during the pandemic.

Cybersecurity threats and policy evaluations are giving rise to this trend.

Over the past two years, IT and security leaders have put more scrutiny on mobile security and mobility ownership policies, and in doing so they’re uncovering a wealth of unnecessary devices. Today’s sophisticated unified communications tools are also a factor as decision-makers more guardedly rationalize the business need for both mobile and VoIP softphone licenses. Tighter controls are being put around hardware assignments.

One client saved 60%: In lieu of providing one phone for every employee (100% coverage), one client shrank their coverage to 40%, generating a 60% savings! Aside from the obvious avoidance in hardware and service costs, their mobile “repos” also reduced management tasks thereby increasing IT productivity.

Ready to jump on this opportunity? Don’t forget, repossessions make buyback programs and market-leading cashback rates critically important as companies recapture the cash value of their mobile devices to further fund mobility and IoT innovation. See why Tangoe’s buyback program leads the industry.

One Client Saved 60%

Shifting Ownership Policies: How to Avoid Being Disappointed

Shifting corporate-ownership policies should also be noted as a trend carrying over from last year. Tangoe continues to see clients revert to a corporate-owned policy after being disappointed in the negligible amount of cost savings generated by a bring-your-own-device (BYOD) approach. Many who explore BYOD policies regret their decision. Find out if it’s time to move on from your BYOD strategy.

Reductions must be made in ways that don’t jeopardize productivity. Tangoe has both mobile management software and consultative services to help you avoid mistakes and make the most of your mobility budget.

RECOMMENDATIONS:

Today’s employees have more phones and softphone licenses than are actually needed due to pandemic overprovisioning. Evaluate usage data to cut unnecessary spending. Also, beware of BYOD, as clients often revert to a corporate-owned policy after recognizing little savings.

5G Wireless is Lowering Costs for Mobility and IoT Innovation

Connectivity and management challenges have previously stood in the way of device-based innovations known as the Internet of Things (IoT). But new evolutions are now clearing those hurdles, sparking a renewed interest in all things mobility including IoT investments backed by 5G fixed wireless networks.

5G lowers fixed-line connectivity costs. 5G offers improved speed and lower latency which means new opportunities to replace MPLS and other fixed-line network services with more affordable 5G services. These savings are highly applicable to mobile and IoT programs.

And, there’s another essential way to save.

Services can remove the pain of device logistics. With the widespread adoption of managed services, CIOs are leaning on partners to administer their growing number of IoT devices that must be procured, secured, and managed. The day-to-day work of handling the corporate fleet is increasingly being outsourced to service providers like Tangoe to help with:
  • Sourcing new hardware assets
  • Managing the inventory of devices – cataloging details and monitoring use
  • Improving Help Desk services
  • Repairing, recycling, and securely wiping devices of data

Tangoe’s own growth rate is evidence of more mobility and IoT investment, with roughly 18% of our 2023 business growth coming from this area.

Learn about Tangoe’s IoT and mobile management services and how they administer devices across every stage of the lifecycle.

RECOMMENDATIONS:

Now is a good time to get in the IoT game or elevate your mobile innovation. 5G provides the opportunity to trade more costly fixed-line network service for 5G services. Additionally, the adoption of device management services makes innovation sustainable with less impact on the IT department.

Hardware & Unlimited Data Plans: New Options Make it Harder to See Savings

The mobile market is getting harder to navigate. From more mobile devices and expanding subsidy timelines to newly available credits and getting unlimited plans right, decision-making isn’t getting easier. If fact, it’s getting harder to distinguish differences and make the right selections.

Overwhelming Hardware Pricing Models

Hardware purchasers have more options than ever. Traditionally, most companies have purchased subsidized equipment through their mobile carrier. Increasingly, however, new pricing variations are making it difficult to evaluate the most cost-effective path forward for your business. Carriers are:
Moving away from the 2-year subsidy model, in some cases expanding it to 3 years
Moving to an equipment installment plan which spreads the device cost over a 3-year term
Offering lower plan pricing, but also providing credits against installment plans
New options can overload business leaders who may not have time to tease out all the nuances.

The Ugly Secrets of Unlimited Plans

At many companies, unlimited mobile data plans are quickly replacing pooled data plans, but despite its name, “unlimited plans” are far from being truly unlimited. Furthermore, all unlimited plans are NOT created equal. Most unlimited plans give the carrier the ability to throttle client data usage, and the conditions under which this happens might surprise you. Data usage throttling can happen:
  • Once data consumption has reached a certain point — even when the network isn’t congested
  • When the network is congested with NO regard to how much data the user has consumed

Additionally, the contract may restrict your ability to switch between plans, making optimization impossible until terms are met.

These “dirty details” make it even more important to get unlimited plans right. Choose carefully among tiered unlimited plans and be fully informed so you can make the most educated decision.

RECOMMENDATIONS:

Look for your 3-year-old mobile contracts. Deals inked in the year 2020 mark the biggest opportunity for mobility cost savings, as business models and consumption habits were starkly different in pre-pandemic years. New hardware pricing models mean more choices but also more confusion. Popular unlimited plans also require detailed investigations to make the smartest purchasing decision.

Mobile Pricing Trends: Prices are Down but Fees are Up

Hardware Options are Driving Down Prices

New mobile devices and pricing models are hitting the market, heating up the competition and driving down prices. Compare various vendor offers to reduce your hardware prices.

Unlimited Plans are More Price Competitive – Know When to Use Them

The price disparities between unlimited plans and pooled plans are narrowing, which makes it harder to know when to opt for a pooled plan. Tangoe finds shared pools of data most benefit large enterprises with thousands of mobile users and lines.

Fees and Surcharges are Up

Carrier imposed surcharges continue to rise and have a material impact on your bottom line. While little can be done about the fees, it pays to know how to avoid them.
Chapter 03

Telecom: Spending, Savings, and Pricing Trends

Telecommunications are a key focal point for companies looking to innovate or improve systems performance in 2024. But many don’t recognize how to upgrade to emerging technologies while also driving savings and efficiencies. These tips will help you deliver winning strategies with the right foresight, technologies, and support to ensure success.

Are You Ready for Space-Age Internet? Satellite ISPs = New Opportunities

Satellite internet service came in with hurricane force this year. Every year, Tangoe monitors which telecom vendors dominate our clients’ financial outlay. In 2023, Starlink (owned by SpaceX) made the largest leap we’ve ever seen in a 12-month period — jumping up from the 81st largest vendor to the 48th largest vendor.

Nearly doubling its Tangoe client marketshare, Starlink’s jump should be viewed as a call to action and foreshadowing of what’s to come. There is a fast-growing demand for satellite services. As this market matures, satellite internet service providers (ISPs) should be closely evaluated for their viability to deliver high-speed, globally reliable connectivity in support of video, voice, and other latency-sensitive communications particularly in remote areas where options are limited.

Satellite ISPs have the distinct advantage of delivering services almost anywhere on Earth, which is particularly beneficial for those in rural regions seeking an alternative to low-speed DSL. In these use cases, Tangoe sees our clients adding Starlink to improve network performance and reliability.

Cheaper satellite hardware and falling launch costs are already opening the satellite market to more competition, and with lower prices it will become a compelling option. To date, Starlink has more than 4,500 active satellites in orbit and offers commercial and residential service to most of the Americas, Europe and Australia. In late 2023, Amazon announced it will compete with Starlink, building equally massive satellite constellations to also blanket the globe.

RECOMMENDATIONS:

Satellite internet services are rising in popularity for their unique ability to deliver global connectivity in remote areas. As heavy-weights like Amazon enter the market in 2024, this is the number-one telecom trend to watch as a source of value and possibly even savings.

Overlooked Savings Opportunities: MPLS Price Drops

As companies move away from MPLS services, fixed-line connections get overlooked as an opportunity for contract negotiations. This small flaw can be a big missed opportunity for IT savings, because MPLS prices are declining.

Most companies still have at least some MPLS services in place and should compare their network modernization plans and migration schedules with their MPLS contract renewal dates to ensure savings are not lost simply because IT fails to focus on a set of services that represent a declining percentage of the overall network. After all, MPLS is among the most expensive of all connectivity service types. When working with clients, Tangoe finds that their phased approaches to modernization are happening at a rate slow enough to easily justify capitalizing on these opportunities.

RECOMMENDATIONS:

MPLS services may represent a smaller portion of your network today, but they still offer large savings potentials. Don’t miss out on falling prices, as fixed-line services likely remain the most expensive connectivity services in your portfolio.

Internet Connectivity Remains the Top Way to Save — But there’s a Catch

Telecom modernization initiatives offer significant upside potential, but internal company resources are a key limiting factor.

Switching from MPLS to internet connectivity is a big money-saving trend, and Tangoe found that in 2023, clients saved 20-30% on like-sized network services or doubled their bandwidth for the same cost. It should also be noted that true payouts, however, were rare – most clients opted to reinvest at least some of their savings by purchasing more network services.

While this strategy is a hot trend, there’s a catch.

Simply put, the talent crunch is killing innovation, and Tangoe saw more evidence of this in 2023 with the low level of unemployment negatively impacting IT, procurement, and telecom groups across our customer base. Macro-trends are also a factor – there is a lack of willingness to expand internal staff in today’s uncertain economic landscape.

Why is talent so critical? Thanks to software-defined wide area networks (SD-WAN) and new secure access service edge (SASE) offerings, it’s far easier today to securely tap into a wide variety of network access methodologies to cut costs, trading MPLS for more affordable internet connectivity. But nonetheless, making those changes happen is still a lot of work:

  • SD-WAN and SASE implementations are major projects, some with long deployment schedules requiring careful planning and management to oversee service cutovers, ensuring business continuity
  • Few companies have an accurate inventory of telecom services, usage, and circuit locations, making it difficult to get modernization projects off the ground
  • Sprawling regional ISPs mean more vendors to manage and financial transactions to oversee — Tangoe’s data indicates that for every 25 telecom services a company uses, they’re handling 200+ invoices and 2,000+ cost allocations

While the desire to modernize is strong, logistics are slowing progress and ultimately inhibiting telecom transformation.

Learn about how Tangoe can give you the IT staff and technical support to champion your telecom transformation from start to finish.

RECOMMENDATIONS:

Telecom transformation initiatives have IT leaders thinking differently about network access. Connectivity is viewed more agnostically than in the past, with Tier-2 ISPs becoming primary providers and direct cloud connectivity offering a significant source of savings (see the Cloud chapter of this report). But telecom transitions can fail without the right support. Consider the human resources, expertise, and managed services you need to quickly exploit the cost savings opportunities behind SD-WAN and SASE.

Telecom Pricing Trends: Internet Gets Cheaper as Fixed-Line Payment Windows Shrink

MPLS & Internet Prices are Falling

As more companies migrate to SD-WAN as a basis of their network architecture, internet access (whether dedicated, broadband and/or 5G fixed wireless) has proven to be the connectivity option of choice with competition driving internet costs down, particularly for high capacity and large bandwidth demands. MPLS prices are down too.

Payment Windows are Narrowing = More Late Fees

In addition to price, speed of invoicing is important to watch because the quicker the client receives their invoice, the more time they have to pay it without late fees. In tracking fixed-line network service invoices, Tangoe found that the number of days between the invoice issue date and the invoice receival date are at all-time highs for 3 out of the 5 largest vendors. One particular vendor is consistently the slowest and worsening with invoice-to-receival delays of 10 days.

Improvements in Invoice Accuracy with One Exception

In regard to fixed-line network services, Tangoe observed improvements reflected in both the number of billing error claims our clients requested and the average dollar value of their associated credits. However, one vendor remains highest in both categories, creating consistent challenges for Tangoe clients.

Costs are Rising for Legacy Voice Services

Prices continue to rise on legacy services as carriers seek to move users to more current technologies. One vendor in particular has taken this strategy to an extreme with tariff pricing rising to as much as 25x or more over contracted rates. In many cases companies have addressed the low-hanging fruit in this area, but time is running out to fully move away from these legacy technologies. Plans need to be developed quickly as hardware shortages and supply-chain challenges can delay projects.

2023 Pricing Trends

Pricing Trends vs 2022

Top 10 Ways to Save on Technology in 2024

Cloud Savings

1

Shop around to save on cloud infrastructure services, including direct cloud interconnects. AWS has hot market competition, and telecom carriers don’t always offer the most competitive price for direct network connections to the cloud.

2

Proactively managing cloud costs are critical ways to prevent expenditures from spiraling out of control. Beware of cloud-flation and increased cloud spending in conjunction with AI investments.

3

Proactively managing cloud costs are critical ways to prevent expenditures from spiraling out of control. Beware of cloud-flation and increased cloud spending in conjunction with AI investments.

Mobile Savings

4

Repossess unnecessary mobile devices and softphone licenses. Companies are grossly overinvested in mobile, making these the new source of mobility savings.

5

Dig up your 3-year-old mobile contracts. Deals inked in 2020-2021 mark the biggest opportunity for mobility cost savings, as consumption and business models were starkly different then.

6

It pays to dive into the details of new mobile hardware pricing options and unlimited data plans. The smartest purchases come from understanding nuances in options and plan limitations.

7

Lower your costs with 5G and device management services. 5G is a cost-effective alternative to fixed-line services, and partners lessen the impact of mobile and IoT innovation on IT teams.

Telecom Savings

8

Telecom payment windows are narrowing, which increases late fees. Monitor the Invoice Issue Date and Payment Due Date to ensure payments are received by the deadline.

9

Switching to internet services as a primary means for connectivity remains a top way to cut costs by 20-30%, but transitions fail without the right support. Careful planning is key.

10

The price of MPLS services is falling, and few companies are capitalizing on this opportunity. The excitement of internet-based cost savings has companies overlooking MPLS savings in 2024.

Conclusion:

Get More Out of Your Technologies and IT Budget in 2024

2024 is the year of technology expense management, and while there is wide savings potential in optimizing cloud technologies, targeted efforts in mobile and telecom optimization also offer significant opportunities in cost reduction. Technologies are evolving at accelerating rates and new providers with disruptive services are changing key market leaders annually.

Tangoe helps financial, technology, and procurement leaders stay on top of IT spending trends, market dynamics, and savings strategies helping them get more value out of their technologies and budget funds. In leveraging Tangoe’s unique insight and market intelligence companies have a money-saving playbook to stretch dollars further and make smart investments in the year ahead.