Breaking Scale

When vendor consolidation turns into vendor lock-in, it’s time to rethink the playbook.

After 28 years in higher ed IT—and 22 as a CIO—I’ve seen our world turn over more than once. For most of my career, IT spending was capital-focused: we bought equipment, secured perpetual-use licenses, and paid predictable maintenance fees, with modest annual increases tied to inflation. But that world is gone.

Since the pandemic, we no longer run most of our core systems on-premises. We subscribe. We no longer own our licenses. We rent them. And as cloud adoption and software-as-a-service took hold, inflation and rising interest rates pushed vendors to shift their posture—from partners to profit centers. In negotiation after negotiation, the message has changed: we’re locked in, and they know it.

In today’s Dispatch, I lay out why our old playbook—scale through standardization—no longer works. And I offer a new strategy for resilience: diversification by design. Because if we don’t break scale now, the cost of staying locked in will only grow.

The big idea

For two decades, higher ed IT leaders pursued scale through standardization—fewer platforms, deeper vendor relationships, and tightly integrated systems. The goal was cost savings, governance, and stability. This wasn’t just an IT preference—it was a leadership mandate. Presidents, boards, and system offices demanded greater efficiency and consistency, even in complex, research-intensive environments where flexibility had long been a hallmark.

But that strategy was built for a different economy. Since the pandemic, inflation, and a wave of private equity acquisitions and corporate mergers—particularly among publicly traded tech vendors—have shifted the incentives dramatically. Vendors that once saw higher ed as long-term partners now treat institutions as growth targets. Price hikes of 30–100% aren’t outliers—they’re the norm. And the more we scaled, the more we got locked in.

The new playbook is diversification—with intent. Every IT product category that relies on external vendors should have both a Lexus and a Toyota: a high-end, premium solution for complex needs, and a practical, lower-cost alternative for the rest. This isn’t about adding complexity for its own sake—it’s about restoring leverage, mitigating risk, and ensuring that no single vendor can dictate terms.

What We Believed vs. What Changed

I now spend much of my time making the case to presidents, chancellors, and boards that we must break scale to protect our institutions. The assumptions that once made standardization a virtue—cost savings, simplicity, leverage—no longer hold. What used to create stability now creates risk. It’s time to rethink the playbook.

• Standardization created efficiency → Now it creates inflexibility

• Scale brought discounts → Now it brings price hikes with no exit ramp

• Fewer vendors meant better support → Now it means vendor fatigue and risk

• Long-term deals fostered trust → Now they handcuff innovation

This shift isn’t theoretical—it’s playing out in real budget cycles, contract negotiations, and stakeholder conversations. To navigate it, institutions need practical strategies that restore leverage and reduce dependence. We’ve started doing exactly that—beginning with our approach to enterprise survey tools.

Case in point: Survey tools

Our campus relied on a well-established and widely used enterprise survey tool. However, after the vendor’s acquisition by private equity, our renewal process shifted dramatically. They proposed a price over 3x our current spend, which we pushed back against. They offered a “compromise” of a phased increase starting at 1.5x, with plans to exceed 2.5x within three years. This was a textbook anchoring move to make a sharp increase seem reasonable.

Most CIOs feel boxed in, especially when the service is faculty-facing. They accept the revised offer to avoid complaints and disruption, then pass the inflated invoice to the CFO. But with supply chain leadership support, we prioritized strategy, restored leverage, and chose a different path.

• Issued an RFP and selected two tools: one “Lexus,” one “Toyota.”

• Reframed the incumbent as premium—still available, but no longer the default.

• Positioned the lower-cost tool for everyday use.

• Educated faculty on the broader impact of pricing—tying it to hiring, projects, and discretionary funds.

• Launched a recharge model to recover costs on “Lexus” usage.

• Set a goal: limit high-cost tool usage to under one-third in year one.

Today, the balance is shifting. We now have leverage in negotiations, greater resilience, and a more sustainable long-term approach.

And we’re applying the same mindset elsewhere:

• Hypervisors: exploring multiple cloud and open-source alternatives.

• CRMs and service desks: diversifying to reduce dependency on any single vendor.

• GenAI tools: avoid single-vendor deals; use multiple tools that suffice.

What’s at stake

If we stay locked into outdated assumptions about scale, we risk more than just overspending:

• Budget fragility: When multiple vendors raise prices at once, a single budget cycle can collapse.

• Innovation slowdown: Consolidated platforms stagnate—leaving less room to try new tools or respond to change.

• Mission impact: Every unchecked price hike is money not spent on students, faculty, or research.

• Loss of trust: When IT can’t manage cost or advocate for users, stakeholders start to question its value.

What once felt like strategic alignment now increasingly looks like exposure. When IT can’t contain costs, offer alternatives, or push back against unreasonable increases, it’s not just budgets that take the hit—it’s credibility. And in a climate where every dollar is scrutinized, losing the confidence of institutional leaders and end users isn’t a minor issue. It’s a threat to IT’s role as a trusted advisor and strategic partner.

The bottom line

Scale was once the smartest play in higher ed IT—fewer platforms, tighter integration, and long-term vendor partnerships. It brought predictability, efficiency, and leverage.

But the market has changed. Private equity, aggressive pricing, and vendor consolidation have turned that leverage into lock-in. What once gave us strength now limits our options—and institutions without flexibility are paying the price.

Thrive in this new environment by adopting two key strategies: ensure every major IT category has both a Lexus and a Toyota option for negotiating power and resilience, and define your expected timeline for each product and lock in favorable terms through the RFP process. Plan for 20 years for cloud ERP, 5-7 years for CRMs, service desks, and cloud infrastructure, and 1-3 years for hypervisors and GenAI tools. With annual renewals, you should be actively reducing your dependency each year—so if a price spike hits, you have the flexibility to walk away.

Breaking scale isn’t abandoning strategy—it’s updating it. Before scale breaks you.