Don't Get Nickel and Dimed! The Ultimate Guide to Fighting Technology Supplier Cost Creep: Part 4 of 4 - Absolute Worst Tech Suppliers 2024

The Top 5 “Absolute Worst” Technology Suppliers of 2024

Preface

Nearly all clients are seeking greater prosperity in 2024.

While client organizations are still focused on cost reductions to meet the challenges of their new economic and market realities, the pent-up demands of the business are increasingly calling for innovation, automation, and organizational performance improvement.

Digital Transformation has emerged as the #1 Way to Boost Performance and Savings concurrently. Client organizations that are digitally transforming are harvesting greater value by:

• Automating tasks (RPA) to streamline efficiencies
• Unlocking data insights (ML) for better organizational (AI) decision-making
• Empowering flexible (Cloud) solutions for more cost-effective scaling

This drives greater innovation, improved organizational performance, and significant cost savings ranging from 25-30% (depending on industry, scope of transformation, maturity of transformation, and the methodology and execution) while at the same time, lowering risk by diversifying and improving the technology supply chain.

NET(net) is the #1 IT Cost and Value Optimization Provider. In the last 20+ years, NET(net) has shaped over $2 Trillion of investment, captured well over $400 Billion of incremental value for our clients and partners, and has an 85% probability of helping you save between 13-53% on your existing and planned IT costs. Our performance numbers are simply unmatched.

Series Description

The ever-evolving landscape of technology is a double-edged sword for businesses. While it unlocks incredible opportunities for innovation, enhanced operational efficiencies, and improved organizational performance, it also presents challenges when it comes to understanding the over-hyped mysticism of these supposed magical solutions that can solve all your problems, and managing the ever-increasing realm of constantly growing IT costs.

Look back on this 4-part blog series, to Parts 1, 2, and 3:

• Part 1: We exposed the top 10 sneaky tactics commonly used by technology suppliers to jack up your costs.
• Part 2: We delved into some of the most outrageous, newly invented fees being slapped on you by technology suppliers in 2024.
• Part 3: We unveiled a Supplier Value Grab Report on 28 of the worst offending providers to help you compare your experience and discover negotiation strategies.

We've equipped you with actionable strategies to fight back and ensure you're getting the most value from your technology investments.

In the final installment of this 4-part blog series, we answer the inevitable question, “who is the worst-of-the-worst":

• Part 4: Ready to see the (in)famous "Hall of Shame"? Today we reveal the top 5 Absolute Worst, most egregious, most expensive (and potentially most value-draining) technology suppliers of 2024, along with tips to negotiate better deals.

Introduction

Increasingly, clients are contacting us with almost unbelievable stores about supplier behaviors that leaves us wondering what the end game is of many of these offenders. Leveraging market strengths to extract greater cost without an agreed upon trade of value with the customer may result in short term benefits for the supplier (such as jamming through a significant annual cost increase), but the elevated levels of mistrust and animosity it creates in their customer base surely won’t translate to long term success unless they believe they are so entrenched they can get away with anything, and then in that case, who wants to work with a tyrant? Tyrants go extinct; think Xero jamming their customers with obscenely over-priced consumables, and Kodak sticking with expensive film for far too long because they could charge a lot more for that medium, and even if they aren’t yet extinct (think IBM), they generally end up in a decades long decline and decay as customers avoid them at nearly all cost.

More than ever, enterprises are highly motivated to eradicate betrayal from their technology supply chains and remedy the conditions that expose them to significant risk. As a result, we are seeing a significant increase in the political will of clients to seek competitive displacements, and a preference to negotiate more meaningful and longer-term protective provisions in their contracts.

That brings me to the Top 5 Absolute Worst Technology Suppliers of 2024. For context, you may want to review the first two entries in this series (links above).

By working with a trusted advisor like NET(net), client organizations can make informed decisions, and ensure they receive the technology solutions they need to thrive in the digital age, without negotiating yourself into a corner and breaking the bank.

Please contact us to share your stories about these suppliers and/or share your experiences with other suppliers that you feel should also make this list.

So who is the “Worst of the Worst”?

Our Methodology: To identify the "worst of the worst” offending suppliers of 2024, we analyzed a combination of weighted factors as per the chart below:

The Scoring System: Each supplier then received a score based on these criteria. Higher scores indicate a greater negative impact on customers.

Important Considerations:

• Assigning weights is subjective. Different stakeholders might prioritize factors differently.
• This analysis is based on NET(net)’s own experiences representing clients as well as publicly available information and may not reflect all customer experiences.
• This doesn’t suggest these suppliers can’t improve or that other suppliers don’t already deserve to be on or may soon be on this list. We will keep monitoring the technology landscape for updates and emerging trends.

This ranking with weighted criteria seeks to provide a clear picture of how these suppliers' policy changes are impacting their customers.

Without Further Ado: The Top 5 Worst Offending Technology Vendors of 2024:

#5: Citrix (28 Points) - The Discount Renegotiation Rollercoaster

Citrix, once a leader in providing remote access and desktop virtualization solutions, has landed at number five on our list. Among other behaviors, their recent focus on renegotiating (often reducing or even eliminating) previously negotiated enterprise discounts during subscription transitions has left a sour taste in many customers' mouths. What was once a predictable budgeting expense has become a potential minefield. Businesses are faced with the unpleasant surprise of significantly higher costs when transitioning from on-premise licenses to subscription models. While core functionalities like remote access and application delivery remain largely intact, the unpredictable nature of future pricing creates uncertainty and erodes trust. Additionally, the availability of alternative suppliers like Microsoft Remote Desktop Services and VMWare Horizon puts pressure on Citrix to offer more competitive and transparent pricing models.

Read more about this in our recent blog, “Are Citrix Subscriptions Burning Customer Bridges?"

#4: VMware - Bloatware Bonanza: Paying for Features You Don't Need

VMware, a giant in the virtualization software space, comes in at number four. Their historic strength has been their ability to provide robust virtualization solutions for businesses of all sizes. However, their recent approach of bundling software with features users might not need has sparked significant customer backlash. These pre-configured bundles can inflate costs considerably, forcing businesses to pay for functionalities they don't require. Imagine a restaurant offering only a "Deluxe Combo" meal that is priced accordingly and includes a soup, salad, steak, lobster, and a chocolate cake, even though you only wanted to pay for and eat the steak. This frustration extends beyond wasted resources. The presence of unnecessary features can also complicate deployment and management, adding a layer of unnecessary complexity for IT teams. The good news? Competition exists. Businesses can explore alternative virtualization software suppliers like Citrix (ironically), Red Hat, and Oracle VirtualBox, all offering more flexibility in choosing the specific features they need. Don't be fooled by the "one size fits all" approach - demand a solution that caters to your specific requirements.

Read more about this in our recent blog,

"Top 5 Concerns & Countermeasures Regarding Broadcom’s Acquisition of VMware"

#3: Adobe - The Creative Cloud Conundrum: Subscription PriceShock and Limited Customization

The bronze medal for supplier unpleasantness goes to Adobe, a household name synonymous with creative design software. Their decision to force a migration from perpetual licenses to a subscription model for Creative Cloud (CC) has caused widespread frustration among countless designers, photographers, and artists. The initial appeal of perpetual licenses – a one-time purchase for lifetime access – has been replaced by a recurring subscription fee. While subscriptions offer the benefit of always having access to the latest features, the "value addition" for many users is negligible. For those who rely on a specific version of Photoshop or Illustrator for their workflow, the pressure to upgrade to the latest version (which may not be necessary or beneficial) can be disruptive and costly. Furthermore, the pre-configured CC suites often include features users don't require, leading to wasted resources and higher costs. Adding insult to injury, the potential loss of offline functionality for some applications disrupts workflows and productivity, particularly for those who rely on reliable internet connectivity. While alternative design software options like GIMP, Affinity Designer, and Serif Draw exist, switching can be disruptive and require significant re-training for users accustomed to the Adobe ecosystem. The lesson here? Carefully evaluate your needs before committing to a subscription model. Negotiate for features you actually use, and don't be afraid to explore alternative solutions if necessary.

Adobe is currently being sued by the US DOJ for tricky (and allegedly illegal) practices.
https://www.theverge.com/2024/6/17/24180196/adobe-us-ftc-doj-sues-subscriptions-cancel

#2: Atlassian - The Perpetual License Puzzle: Nickel and Diming for Value

Atlassian, a dominant player in the project management software market, snags the silver medal for supplier dissatisfaction. Their transition to a subscription model for popular tools like Jira and Confluence has been met with widespread customer pushback and discontent. At the heart of the issue lies the lack of significant value addition offered by subscriptions compared to perpetual licenses. Customers who previously purchased perpetual licenses enjoyed full access to features and functionalities, with the ability to customize their tools to fit specific workflows. The subscription model, however, often introduces limitations on customization and user management, forcing businesses to pay extra for features they previously had access to. This "nickel and diming" approach feels exploitative, particularly for established customers who have invested heavily in Atlassian products over the years. Beyond the limitations themselves, migrating data and workflows from perpetual licenses to a subscription model can be a complex and time-consuming process. The potential for data loss or disruption to ongoing projects adds another layer of frustration for businesses heavily reliant on Atlassian tools. There are, thankfully, alternative project management solutions like Asana, Trello, and Monday.com that offer a combination of features, customization options, and transparent pricing models. For Atlassian customers feeling trapped in a subscription model that delivers diminishing returns, exploring these alternatives may be a viable path forward.

Read more about the Top 5 Ways to Save on Atlassian

Jonathan Maul quote:

#1: Oracle - The Java Audit Juggernaut: Fear, Uncertainty, and Doubt as a Service

And the dubious honor of the absolute worst technology supplier of 2024 goes to... Oracle! Their fabrication of new licensing rules and subsequent aggressive Java audits on the back of ambiguous licensing terms creates a climate of fear, uncertainty, and doubt (FUD) for businesses using their Java technologies. Oracle has taken a particularly heavy-handed approach to Java licensing audits, targeting organizations with hefty fines for alleged non-compliance with complex and often contradictory licensing agreements. The ambiguity surrounding Java licensing terms leaves businesses vulnerable to financial penalties, regardless of their actual usage. Imagine being audited by the IRS for a tax you didn't even know existed, or a new tax that you were told would never apply to you! This tactic not only disrupts budgets but also further damages trust between Oracle and its customer base. Furthermore, Oracle's limited flexibility in licensing models creates an additional layer of customer frustration. Businesses are often forced to purchase more licenses than they actually require to avoid the risk of potential audits and fines. While migrating away from Oracle's database solutions like MySQL can be complex and costly, alternative open-source databases like PostgreSQL offer a viable escape route for some organizations. The key takeaway? Fully protect your rights, get expert insights and guidance from an established and credible source that not only has demonstrable success in this area, but is also a conflict-free advocate (no resellers, no industry analysts, nobody who also takes money from Oracle), and don't be afraid to challenge Oracle's audit findings. Keep your general counsel involved in the entirety of the process and seek outside legal counsel expertise from a group like Bortstein Legal Group if necessary.

Here is What You Need to Know About Oracle’s Java Licensing Changes.

The Key Takeaway:

As an enterprise customer and technology buyer, you need to understand that members of your technology supply chain are engaging in asymmetrical warfare, and they have identified and targeted you (the people with the money) as the enemy. The technology landscape is now a constantly evolving battleground as a result. As a business, it's crucial to stay informed about tyrannical supplier practices, and carefully evaluate all options before entering negotiations to buy or renew any agreement. Negotiating from a position of knowledge and leverage empowers you to avoid the pitfalls of predatory supplier practices.

Thank You!

We hope you enjoyed this 4-part blog series where we exposed the 10 sneaky tactics technology suppliers use to jack up your costs, we revealed our top 5 examples of newly invented fees technology suppliers are charging you in 2024, we chronicled the predatory behavior of 28 major technology suppliers, and we unveiled our list of the 5 absolute worst technology suppliers of 2024. Please share your feedback and requests for topics in the future!

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About the Author

Steven C. Zolman is a leading expert in technology investment optimization and the founder, owner, and executive chairman of NET(net), Inc., the world's leading technology investment optimization firm. With over 30 years of industry experience, Mr. Zolman has helped client organizations of all sizes maximize the value of their technology investments by minimizing cost and risk and maximizing the realization of value and benefit.

About NET(net)

Founded in 2002, NET(net) is the world’s leading IT Investment Optimization firm, helping clients find, get, and keep more economic and strategic value in their technology supply chains. Over the last 20 years, NET(net) has influenced trillions of investment, captured hundreds of billions of value, and has helped clients cost and value optimize all major areas of IT Spend, including XaaS, Cloud, Hardware, Software, Services, Healthcare, Outsourcing, Infrastructure, and Telecommunications, among others. NET(net) has the experience you want, demonstrates the expertise that you need, and delivers the performance you demand and deserve. Contact us at info@netnetweb.com, visit us online at www.netnetweb.com, or call us at +1 (616) 546-3100 to see if we can help you capture more value in your IT investments, agreements, deployments, and relationships.

NET(net)’s Website/Blogs/Articles and other content is subject to NET(net)’s legal terms, offered for general information purposes only, and does not constitute legal advice. While NET(net) may offer views and opinions regarding the subject matter, such views and opinions are those of the content authors, are not necessarily reflective of the views of the company and are not intended to malign or disparage any other company or other individual or group.