INDUSTRY VIEW
The problem becomes apparent when those decisions accumulate. An organisation can find itself operating numerous technologies, each with its own licences, renewal cycles, vendor relationships, partner relationships and training requirements. The individual products may have been cost-effective, but the environment they collectively create is not necessarily so. Add overlapping functionality and the operational burden of making disconnected systems work together, and the cost that was saved during procurement, can quickly reappear elsewhere. This is particularly significant because the teams responsible for managing these environments haven’ t necessarily expanded alongside them. Commercial organisations are increasingly asking relatively lean IT functions to manage technology estates that have grown steadily in both scale and complexity. The SME’ s traditional advantage was simplicity. Once that simplicity disappears, the economics behind buying technology piecemeal begin to look very different.
When cheap technology becomes expensive IT This is where the distinction between acquisition cost and total cost of ownership becomes important. Comparing the price of two products is relatively straightforward. Quantifying the cost of training people across multiple technologies, managing numerous renewals, maintaining several vendor relationships and troubleshooting across disconnected systems is much harder.
For a large enterprise with specialist teams, some of that complexity can be absorbed. For an SME with a smaller IT function, it can become disproportionately expensive. This is why more commercial customers are beginning to look beyond what a technology costs to buy and towards what their overall environment costs to operate. Consolidation, once difficult to justify against the upfront price of individual tools, starts to make considerably more sense when viewed through that wider lens.
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