Deep Dive: Rethinking Scale in the Era of Vendor Lock-In

Olivia Carter

So, Mark, take me back a few years. There was this big belief, right? That if you had fewer systems and stronger vendor relationships, you’d get better deals, more stability... you know, like a simpler, smoother ride?

Mark Putnam

That's right, Olivia. It was the dominant strategy for a long time. Higher ed IT leaders, and their presidents and chancellors, felt that consolidating platforms would lead to cost savings, better governance, and—well—more leverage with vendors.

Olivia Carter

Wait, but like, how did that even work? Was it just about buying everything upfront and sticking with it?

Mark Putnam

Kind of. Back then, we operated on a capital expenditure model, which meant owning hardware, purchasing perpetual licenses, and paying maintenance fees that, honestly, were pretty predictable. No surprises there.

Olivia Carter

Okay, so it was like, you bought the stuff, and then—boom—it was yours?

Mark Putnam

Exactly. But that all started to shift after the pandemic. Institutions moved quickly to cloud-based subscription services. And that’s where the cracks in the old approach started to show.

Olivia Carter

The cracks?

Mark Putnam

Yes. See, the shift to cloud services came at the same time as inflation and interest rates began to quickly rise. Vendors—especially those involving private equity or resulting from corporate mergers—began to change their priorities. Instead of being our partners, they became motivated by maximizing profit.

Olivia Carter

Ouch. So, basically, they knew you were stuck?

Mark Putnam

That’s exactly it. What used to be viewed as a strategic strength—having tight vendor relationships now looks more like... well, like lock-in. The more dependent we became on their ecosystems, the harder it’s been to pull out when prices skyrocket.

Olivia Carter

Right, so the strategy that was supposed to simplify everything is now kinda working against you?

Mark Putnam

That’s one way to put it. Consolidation made sense in a predictable environment. But today’s dynamics are all about agility—and legacy decisions are leaving many institutions boxed in.

Olivia Carter

It’s fascinating how what once felt like a win—a streamlined vendor approach—has now turned into a bit of a trap. So, Mark, how are institutions managing to untangle themselves from this situation?

Mark Putnam

It's a complex situation. The drive for efficiency—centralizing platforms, extending long-term deals—came with a hidden tradeoff. We gave up flexibility and, worse, leverage. It’s an unintended consequence of over-standardization.

Olivia Carter

Wait. So, when these vendors start hiking prices, you can’t just... leave?

Mark Putnam

Not without major disruption. The systems are so tightly integrated into daily operations—everything from teaching tools to financial systems—that switching isn’t just expensive; it’s operationally risky. And vendors know that.

Olivia Carter

Wow. And you're saying support isn’t what it used to be either?

Mark Putnam

Unfortunately, no. As these vendors consolidate—merging or getting bought by private equity—the focus shifts away from customer service and innovation. Instead, it’s about maximizing profit. Support quality drops. Updates slow down. Terms become rigid.

Olivia Carter

So, lemme get this straight. You've got rising costs, worse support, and you’re stuck in longer contracts. That’s like, the trifecta of frustration.

Mark Putnam

That’s spot on. These price hikes aren’t small either. We’re talking 30, 50, even 100% in some cases. And when budgets are already strained, it’s an impossible position.

Olivia Carter

It’s like the old playbook—consolidate, streamline, buy in bulk—it just doesn’t work anymore, huh?

Mark Putnam

Not in today’s environment. Those assumptions about cost savings and efficiency? They’re outdated. We need a strategy that reflects the current landscape—one that prioritizes resilience and flexibility.

Olivia Carter

And by flexibility, you mean...?

Mark Putnam

Diversification. Having alternatives in place, multiple vendors in every key category. It’s about adapting to modern realities—you can’t let any single vendor dictate terms.

Olivia Carter

Okay, so like, breaking away from one-size-fits-all solutions. Ditch the old assumptions and change the approach.

Mark Putnam

That's right. It’s a complete mindset shift, and it’s not just theoretical. We’re already seeing it play out in real-world cases. Let me give you an example...

Olivia Carter

You've mentioned something about this before—something about survey tools? What happened there?

Mark Putnam

Yes. So, we had this enterprise survey tool we’d relied on for years. It worked well, faculty liked it, and honestly, it felt like one of those systems you just never think about replacing.

Olivia Carter

Until...?

Mark Putnam

Until the vendor was acquired by private equity. After that, their approach changed dramatically. Contract renewal came up, and they hit us with—get this—a price over three times higher than what we were paying.

Olivia Carter

Wait, what? Three times? How do they even justify that?

Mark Putnam

Oh, they called it a “market adjustment” and offered a “compromise”—phasing the increase over three years. But even that would've taken us to 2.5x our current spend by the end. Classic anchoring tactic, trying to make their outrageous opening seem reasonable.

Olivia Carter

Jeez, and I’m guessing most places would just cave, right? Faculty needs the tool, complaints start piling up, and the university absorbs the hit.

Mark Putnam

That’s exactly the trap. But instead of just accepting it, we decided to rethink our strategy. We issued an RFP—basically a call for proposals—and selected not just one, but two survey tools. One was a high-end “Lexus” option, and the other was a more affordable “Toyota.”

Olivia Carter

Okay, I see where this is going... give people a choice between the luxury model and the practical one?

Mark Putnam

Exactly. But more than that, we reframed the whole issue internally. This wasn’t just a tech decision. We made it clear to faculty and staff that unchecked vendor pricing doesn’t only hurt the IT budget—it impacts hiring, strategic projects, even student resources. Every dollar overspent on tools is a dollar not available elsewhere.

Olivia Carter

Right, connect it to the bigger picture. So how’d the faculty take that?

Mark Putnam

At first, there was pushback, of course. But we introduced a recharge model—basically, we made the costs of using the premium tool visible to the departments using it. And we set a target—to keep usage of the Lexus tool under one-third in the first year. That way, people really had to think about whether they needed the extra bells and whistles.

Olivia Carter

Smart. So instead of IT playing bad cop, users had more ownership of those decisions?

Mark Putnam

That's right. And you know what? It worked. Usage started shifting toward the Toyota tool for most daily needs, and we retained the Lexus option for cases where it really added value. The result was immediate leverage with the vendor and—you know—more sustainable operations overall.

Olivia Carter

Wow, that’s such a power move. Honestly, it’s kinda brilliant how you flipped the script there.

Mark Putnam

Thanks, Olivia. And what’s important is that this wasn’t just a one-off. We’ve started applying the same principles across other tool categories—hypervisors, CRM systems, even AI platforms.

Olivia Carter

So Mark, it sounds like the Lexus-Toyota approach isn’t just about tool choices—it’s about setting a bigger strategy, right? How does that play out beyond survey tools?

Mark Putnam

That's right, Olivia. It’s not redundancy for redundancy’s sake. It’s about restoring leverage. Vendors—you know—they behave very differently when they know you’ve got a second option.

Olivia Carter

Like, they don’t wanna lose the account completely, right?

Mark Putnam

Right. They become more willing to negotiate, more responsive to service issues, and they’re even open to innovation in ways they might not be otherwise.

Olivia Carter

So strength here isn’t, like, more systems. It’s having the right mix to keep them on their toes.

Mark Putnam

Exactly. And we’re applying this across the board. Take cloud infrastructure as an example. Instead of just relying on AWS, we’ve diversified with Azure. Same with virtualization—we’ve mixed VM Ware with open-source hypervisors. Even AI tools—we’re staying far away from those big one-size-fits-all deals.

Olivia Carter

Wait, wait—open source? That feels like, risky sometimes. Doesn’t it, I mean, come with its own challenges?

Mark Putnam

It does, sure. But that’s why it’s all about balance. You use open source where it fits, and you keep a premium vendor for the complex stuff. It’s not replacing one entirely—it’s about having alternatives in place.

Olivia Carter

Gotcha. And the contract timelines you mentioned earlier—20 years for cloud ERP, but only a couple years for AI tools—why’s that a thing?

Mark Putnam

Great question. It all comes down to how fast the technology evolves. ERP systems are like the backbone of your operations—you lock in terms because replacing them every few years? Not realistic. But tools like AI or cloud infrastructure? Rapid innovation means you don’t wanna commit long-term. Flexibility is key there.

Olivia Carter

Right, so it sounds like part of the strategy is knowing when to commit and when to keep your options open?

Mark Putnam

That's right. And you prepare exit ramps by actively managing dependency, in case you need it. That way, if a vendor tries to pull a fast one with a price spike, you’ve got the flexibility to shift your spend to your alternate provider.

Olivia Carter

It’s honestly kind of brilliant, Mark—this whole shift to diversification. But I gotta ask, is this something that every IT leader can just start doing tomorrow?

Mark Putnam

Not immediately. It takes planning. You’ve gotta rethink your playbook and build with purpose. But the end result? Resilience. It’s what lets us focus on the things that really matter—supporting faculty, driving student success, funding innovation.

Olivia Carter

Yeah, and not just pouring money into overpriced contracts, right?

Mark Putnam

Exactly. When IT leaders diversify and plan strategically, it’s not just about saving costs—it’s about creating room to advocate for what truly matters. Scale alone won’t give you that. A diversified portfolio does.

Olivia Carter

Well, this has been such a fascinating deep dive, Mark. Honestly, I feel like I’ve learned so much—and probably a few vendors out there are sweating a little now!

Mark Putnam

I'm not sure about that. But it’s all about building a fairer, more resilient supply-chain. Thanks for having me, Olivia.

Olivia Carter

And that’s all for today, folks. I’m Olivia Carter, and we’ll see you next time on “Dispatches from an Internet Pioneer.”