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Augmented software portfolios – the modern arena of software sourcing?

By Stephen White | January 20, 2021 | 0 Comments

Sourcing, Procurement and Vendor Management LeadersresellerlicensingIT Cost Optimizationcloudasset managementNegotiating IT Contracts

‘…so very tiny, so incredibly small …’*

In years past, software reselling has been redefined, as progressively differentiation through service lines were introduced. Convention of utilizing software resellers to navigate licensing nuances, with individual specialist a determinant of successful outcomes and a productive relationship, company level differentiators are oriented to add-on services.

It’s no secret professional services are more valuable to resellers, with higher margin rates and proprietary IP both delivering on board and investor expectations. The nature of these services continues to evolve. Software asset management, application and infrastructure services, cloud monitoring and cost management have all been added to varying degrees. Whilst high profile and high value enterprise projects may remain the target for resellers, demand for a minnow has developed – see Market Guide for Software Resellers, Market Direction.

Disaggregation of the application portfolio, a factor of emergent SaaS providers and market access for start-ups, but also a desire to limit dependency on ‘megavendors’ has driven significant growth in demand to manage lower value vendors and contracts. Some enterprise have seen their software vendor portfolio double in scale, or more, in the past ten years, yet resources available for contract analysis, management and optimization have seen limited growth.

Whilst focus gravitates to high value relationships and contracts for good reason, demand for further optimization drives focus to lower tiers, where collective potential value lies. As larger vendors become more difficult to negotiate terms with, while, optimization efforts across the top tier consume all available resources, attention turns to how the ever-expanding balance of the software portfolio may be effectively addressed.

This latent demand has emerged, and is on the rise, as organizations arguably endeavor to turn over more rocks, seeking greater value following economic impacts of the loathsome pandemic. Contract analysis and negotiation services, hitherto oriented to the top tier, are in demand deeper within the portfolio. Optimization services across contracts in flight and ad-hoc requirements are similarly now more often sought through to lower tier requirements.

Tail spend may not hold the highest billing, nor be the top ticket to recognition. It is, however, now less often overlooked.

* ‘The Lion Inside’, 2015, Rachel Bright and Jim Field,, Orchard Books


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