Gavin Williams’ Post

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Technology Transformation Leader

I have been thinking a lot about software and licensing costs recently. It's becoming a more and more significant area to examine for enterprise spend, at the same time, it is itself undergoing significant changes in terms of taxonomy. In the first instance, it used to be useful to separate Hardware charges vs. software charges in the BOM. This has become more complex with the pervasive presence of cloud. Is it a useful exercise to try to separate e.g. the EC2 consumption of AWS and flag that together with onprem costs under "hardware", or flag the consumption of Azure Purview under "software costs"? Of course it depends fundamentally on a) what you're going to use the data for, and b) what behaviour do you want to affect in the use of that data. The second item in my head is the cost of software vs. value. Many people will remember when Microsoft Visio was £35 as a flowchart tool, then the price went up to £300 as it changed into a multi-purpose business process mapping tool etc. That's a great example of software being priced at value to client. Unfortunately what we are seeing sometimes in the market is software being priced particularly where there is a difficulty to exit or lockin scenario. In which case this becomes almost monopoly rent-seeking. There are many examples of this. However, the speed of change and reducing barriers to entry in many areas mean that the latter situation becomes much less tenable in the long (or even medium!) term.

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