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“Fragmented Spend”

Updated: Sep 3, 2022

I have been in the IT industry since 1988, and I cannot think of one deal that has been done without a good hard negotiation on the price. That’s what we have thrived on, making sure we do a good deal for our clients whilst maintaining our own margin.

This negotiation was largely because whatever was being procured at the time was a subset of a larger budget, that ultimately rolled up into the IT budget, so somebody (usually the CFO) had visibility of the overall budget and could reconcile spend against the budget.

This same logic does not appear to apply when it comes to cloud spend, businesses now appear to have fragmented IT expenditure, and accepted little or no up-front visibility on what this expenditure is.

Is this a sinister move by the big cloud vendors to fragment IT expenditure and make line item invoicing so difficult to understand just to bolster their own profits or is it just the incompetence of the business giving their profit away.

I don’t like to think that anybody would do something deliberately sinister, and the fragmentation and line-item invoicing is because of flexibility, and number of individual services as opposed to anything sinister.

That being the case it must come back to the business to ensure that they are getting value for money from their cloud spend, and not just blindly riding the cloud first wave

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