380 Software Tools and the Hidden Cost Most Organisations Miss

Alex Mackender
1 hour ago
3 min read

In large enterprises, software complexity almost always grows faster than commercial strategy.This week reinforced that. On a recent call with a multi-division organisation, one number stood out immediately:

380 different software applications across the business.

That’s 380 renewal dates.

380 contracts.

380 pricing conversations.

And 380 potential leverage failures if timing isn’t managed properly.

This isn’t unusual. It’s becoming standard.

“We Already Have Good Pricing”

Because this organisation benefits from global agreements and significant scale, the internal view was familiar:

“Our discounts are strong we don’t need to worry.”

On paper, that sounds reasonable.

In practice, it’s rarely true.

Large enterprises often do secure strong headline discounts. But discount percentage alone tells you very little about commercial efficiency.

We repeatedly see overspend where:

• Licence structures don’t match usage

• Multiple tools overlap in capability

• Global agreements are under-utilised

• Renewals are addressed too late

• Contracts auto-renew under unfavourable terms

Good pricing is not the same as good structure. And structure is what determines outcome.

Optimisation Is Not Leverage

The team discussed their global Microsoft agreement. The question wasn’t about price — it was about optimisation:

“How do we maximise what we already pay for?”

That’s sensible. But it misses a critical nuance.

Vendors don’t just price for usage. They price for dependency.

When a vendor becomes deeply embedded across business units, renewal conversations shift. The commercial dynamic moves from partnership to margin protection. At that stage, optimisation alone doesn’t create leverage. It simply helps you operate more efficiently inside the commercial framework the vendor already controls.

True leverage only exists before dependency hardens.

Specialised Systems Create Strategic Risk

The organisation also highlighted several bespoke, industry-specific platforms.

These tools:

• Sit deep inside operational workflows

• Have limited direct alternatives

• Require specialist vendor expertise

• Are politically difficult to remove

That’s precisely where commercial leverage disappears. When a tool is mission-critical and specialised, vendors know the switching risk is low. Renewal pressure weakens. The only counterbalance is timing.

We shared a case where a security platform was renegotiated 14 months before renewal. Adoption increased, yet the contract was reduced by over 50%, delivering seven-figure savings. Had that conversation started three months before expiry, the outcome would have been materially different.

In software, timing doesn’t assist negotiation.It defines it.

The £50k–£250k Blind Spot

Most organisations obsess over:

• SAP

• Microsoft

• Salesforce

They are visible. Strategic. Politically sensitive. But savings leakage often hides elsewhere.

Mid-tier and long-tail contracts, typically in the £50k to £250k rang, rarely receive structured scrutiny.

Individually, they feel immaterial.

Collectively, they represent millions.

Strategic vendors protect revenue.

Long-tail vendors protect margin.

Both require different negotiation approaches. Few organisations manage either proactively.

When Budget Pressure Meets Renewal Cycles

One executive joked during the discussion:

“If prices increase, do you share in the increase too?”

It was light-hearted. But the underlying reality is serious. Software pricing rarely increases purely because of product innovation.

It increases because:

• Usage expands

• Dependency deepens

• Renewal windows approach

• Vendor quarter-end pressure intensifies

When renewal cycles are managed reactively, pricing power shifts almost entirely to the vendor. Not because internal teams are ineffective, but because the commercial clock has already run out.

The Real Shift

What stood out most on the call wasn’t the scale of the estate.

It was the mindset.

There was no denial. No defensiveness. No assumption that scale alone guarantees efficiency.

The question was simple:

“How should we be thinking about this properly?”

That’s where commercial transformation begins. Overspend doesn’t appear overnight. It accumulates through:

• Fragmented purchasing

• Siloed decision-making

• Late engagement with renewals

• Auto-renewal mechanisms

• Lack of estate visibility

Over time, complexity compounds faster than governance. And one day, you find yourself managing 380 tools with no cohesive commercial strategy tying them together.