Meanwhile, companies that offer outsourcing services will, to varying degrees, sell their software either as a product in its own right or in a managed (that is, hosted) model, although Gartner predicts that such an approach, currently the most popular, will decline in favor of a software-only or an outsourced approach (see chart).

Many TEM service contracts are priced as a percentage of a customer's telecom spending — running anywhere from just over 1 percent to 2.5 percent. But some contracts are based on the savings a customer realizes. Pricing strategies seem to be in flux. MSS Group, for example, currently prices the majority of its services as a percent of telecom spend, but over time may move to a model that reflects customer savings or return on investment, according to CEO Sean Erickson.

Don't be surprised, therefore, if the dozens of relatively small firms in this space each seem to be offering something slightly different. The right choice may come down to a client company's telecom and IT infrastructure (can it run TEM software effectively?) and the complexity and scope of its telecom spending. —N.A.

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