Messente avatar logo

Vendor consolidation affects the bottom line

- 5 MIN READ - 12 May 2017

The idea of vendor or supplier consolidation is not new, although it tends to be a fad every few years. It’s as if every time a new type of product or service is created, or variation thereof, businesses onboard a new vendor partner. Eventually, someone in the business (usually in accounting) realizes that they’re paying a lot of different bills for similar products and service, and sends the business down a path of consolidation. While the benefits of consolidation seem obvious, drawbacks do exist, especially with software partners.

Let’s start with the benefits. 

Now, disadvantages.

When is there a good scenario to consolidate, you ask?

Only when consolidation means the reduction of business processes in what the software is intended to do, creating business value, or the partner has an advantage in economies of scale. This typically occurs when the partner has expertise in a specific vertical or industry, but provides more reach, whether geographical or virtual audiences. Taking Slack into example, the business process is internal communication. Prior to the use of Slack, teams would use several communication tools. In the fog of email, instant message apps, and message boards, internal communication slows and delays projects. Slack solves that, creating an opportunity to consolidate software tools.

In Messente’s case, the operations team partners with over 700 mobile network operators, in nearly 200 countries, to deliver messages, time-critical notifications, and verification PINs. It’s a huge reduction in business processes for IT, development, and accounting, as the business no longer has to figure out how to send these messages to customers across several network operators, in different geographical regions. Not to mention economies of scale, since Messente sends quite a few messages a day, allowing us to negotiate costs. Lastly, we’re really good at what we do (the perfect storm!)

Simply put, when considering a reduction in software partners, solely making the decision for the sake of vendor consolidation may not be the best idea. Consolidate based on expertise, reach, and creating overall business value.



Yuriy Mikitchenko

Yuriy Mikitchenko - Head of Marketing

A transplant from the United States, Yuriy brings his marketing know-how to Messente. His background is in B2B marketing and sales, working with tech corporations and startups in the Portland, Ore. and Seattle, Wash. area. Now he's giving Estonia a fresh perspective on overall marketing.

How we help with the regulations of global messaging

26 Jun 2017

Forgoing the need to integrate network operators everywhere you need messages delivered is one of the main advantages of using a global messaging platform. Each connection includes legalities, which includes reviewing several agreements and negotiating terms, and technical tasks, like setting up the connections. So, a single company going through this process on their own would invest a lot of time doing things that have already been done by a messaging platform. Also, the company would end up with higher pricing from network operators, as it has much less traffic.

Lauri Kinkar

Lauri Kinkar

Your sales lab time is scarce

20 Jun 2017

In the series about sales research, I touched upon allocating about 30% of your research time on finding new ideas and possibilities around sales tactics. But how do you actually do it and what do you look for?

Uku Tomikas

Uku Tomikas

An open letter to financial institutions from Yuriy

09 Jun 2017

To the bank, credit card company, and investment firm I work with: I trust you. I really do.

If I didn’t, I wouldn’t put my hard-earned money in your hands. While I’m not a Certified Financial Analyst, I am financially savvy, so I understand that we have a mutually beneficial relationship. From a high-level, banks use the money I deposit to sell loans and invest in other financial instruments. Credit card companies make money on interest charges, other fees, and transaction fees from merchants. The brokerage firm makes money through fees on my account. On the other hand, all I expect is that you are honest about your services, provide returns, and keep my money safe.

Yuriy Mikitchenko

Yuriy Mikitchenko

Start sending messages to

for € N/A

Contact us