A look back on the PoC phase of the Beltug Vendor Observatory

The purpose of the Vendor Observatory is to provide ICT decision-makers with a platform to navigate the complexities of vendor management, with each session focusing on different aspects such as contractual complexities, cost structures, compliance challenges and negotiation strategies.

Beltug members (users only) who missed a session can contact us for slides.

Focus on Microsoft

The kick-off meeting for the Vendor Observatory started with a focus on Microsoft. According to Microsoft, Copilot is at the forefront of its innovation. While the company communicates that this AI integration will enhance productivity and automation, the cost implications are significant. Organisations must therefore carefully assess the impact on costs and licensing structures.

Additionally, frequent updates and changing licensing terms make managing Microsoft contracts a challenge. In our session, 42% of participants indicated that negotiating licensing terms and costs remains their biggest hurdle.

Other discussion points covered the cost and value of Microsoft Unified Support, and Microsoft’s audit practices, including indications that audit activities could increase.

Focus on Broadcom

Following Broadcom’s acquisition of VMware and Broadcom’s strategic shift in business strategy, many questions and uncertainties remain for its customer base. Furthermore, significant price hikes for VMware products have been combined with a lack of clarity and even misleading information around pricing in particular. At the same time, the licensing shift to subscription-only models and bundled licenses limits customer flexibility.

Another major effect has been an overall disruption to the VMware reseller and partner ecosystem, which is resulting in a loss of knowledge and support for end-users.

Focus on SAP

Many Beltug members use SAP, and are transitioning to S/4HANA. SAP’s growing emphasis on cloud services, revised pricing models and enhanced functionalities are influencing how organisations work with the vendor. The discussion around the move to S/4HANA covered how companies must carefully plan their migration strategies, taking into account timelines, cost implications and evolving licensing requirements to ensure a smooth transition. The exchange included ‘tips & tricks’ for managing the migration.

88% of the participants indicated that the complexity of the licensing models is one of the biggest challenges of working with SAP. Obstacles include rapidly evolving offerings, complex cost reduction strategies and the shift away from perpetual licences to subscription models.

During discussions, the topic of how complex it is to shrink yearly spend arose: reducing subscription costs and maintenance costs are both extremely difficult outside the content of new business.

Focus on Oracle

With the growing emphasis on cloud-native solutions, data-driven decision-making and integrated systems, Oracle positions itself as a key partner in enterprise digital transformations.

At the Vendor Observatory, there was discussion around Oracle’s Unlimited Licence Agreement (ULA), including the structure, implications, benefits and limitations. The insight extended into the strategic considerations around implementing and exiting ULAs, including the need for IT and management commitment, planning for product growth, and preparing a global deployment report for certification.

Another discussion point centred around Oracle’s segmented sales structure and the importance of streamlining communication with Oracle through a vendor management team. Recommendations included: ensure internal alignment, be cautious when sharing sensitive information, and use formal tools like balanced scorecards to support communication and maintain a strong negotiation position. Consolidating Oracle-related information, establishing a single point of contact, and setting up a strategic vendor management program can all be of value, as well.