The 2024 market for technology was dominated primarily by strategic buyers who wanted to build capabilities in mission-critical subsectors, such as artificial intelligence. Microsoft’s investment additional resources in OpenAI and Databricks acquisition) data analytics, cloud (i.e. Clearlake’s acquisition of Alteryx and IBM’s acquisition of Apptio) and security (i.e. Cisco’s purchase Splunk and Rocket Software’s acquisition of Micro Focus). Tech vendors are increasingly focused on creating a single technology stack that can meet their customers’ most complex demands.
For a company’s technology acquisition strategy to work effectively, it must have a “value culture” where the IT management team and senior engineers make decisions that are focused on maximizing the value of their firm’s spending. This requires creating competitive playing fields for the major areas of supply in the business and making sure that purchasing decision makers do not let relationships rob them of the leverage they have to negotiate.
In best practices the procurement team and the technology decision maker are on the same page throughout every stage of the technology purchase process. This allows them to ensure that the purchasing decisions are driven by the underlying business need, and not by the relationship with the vendor. This also helps to reduce costs, since it ensures the buying team does not direct purchases to a particular supplier. In the worst case scenario, an unintentionally implemented process could weaken a company’s bargaining ability and lead to overspending. This was evident in the Daimler Benz-Chrysler merger.