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Consolidation in the Vendor Market Is Now a Technical Risk
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Three of the products we depend on changed hands in the last eighteen months. In each case the acquirer was larger, already sold us something else, and made reassuring noises about continuity. In each case the practical effect on us was the same within a year: a price rise well above inflation at renewal, a slower and less specific support relationship, and a product roadmap that stopped mentioning the features we cared about.
I have started treating this as an engineering concern rather than a procurement one, because the mitigations are technical and they take longer than a renewal cycle allows.
The market is going in one direction. Categories that had eight credible suppliers a decade ago now have three, and two of those are divisions of the same group. When a supplier is acquired, our leverage does not decline gradually; it disappears on the day the deal closes, and the alternatives we would have threatened to move to are frequently owned by the acquirer as well. Negotiating hard against a vendor who knows you cannot realistically leave within the contract term is theatre, and both sides know it.
What helps is unglamorous and has to be built in advance. Knowing, for each significant supplier, what a migration would actually cost in weeks and people, rather than assuming it is possible. Keeping data in formats we can export and read without the vendor's software, and testing that export occasionally rather than trusting the feature exists. Preferring integration through interfaces we could reimplement over proprietary connectors that only work in one direction. Avoiding the bundle discount that makes four dependencies into one, however good the arithmetic looks in the first year.
None of that is free, and I would not apply it everywhere. For a tool the team could swap out over a fortnight, take the discount and enjoy it. For the systems that would take eighteen months and a programme to replace, the premium for keeping an exit possible is one of the better insurance policies available.
The next decade of infrastructure work will involve fewer suppliers with more power. That is a market condition, not a complaint, and the organisations that handle it well will be the ones that priced their exits while they still had a choice.
– Serguey Shinder
Read original: https://dev.to/serguey_shinder_4ab9b87b1/consolidation-in-the-vendor-market-is-now-a-technical-risk-3mmd
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