A grounded view into shifting enterprise IT spend, rising renewal pressures, and the tactics shaping modern sourcing strategy.
Jon, before we dive into the study, we’d love to hear a little about your own journey. What shaped your perspective on IT sourcing and led you to your current role as CEO of NPI?
The first half of my career was in tech sales, mostly in software sales leadership. It was easy to observe the dynamics that shaped the sales practices and tactics in the market. We started NPI to protect IT buyers from the IT vendor side. Fun fact: NPI stands for Negotiation Partners Inc – and that was really the ethos from the beginning. But we quickly realized the data and intelligence was critical in driving world class outcomes beyond just negotiation strategies.
The “State of Enterprise IT Sourcing” study highlights major shifts in enterprise IT spend. What stands out to you as the single most surprising or important finding in this year’s report?
I would say that 82% of IT spend on average is locked up in some recurring, renewing contract mechanism. IT vendors have perfected the model of lock-in and inflexibility within these renewals. That is why enterprises are having such a challenge in reining in costs.
Tariffs and trade policies are reshaping costs across hardware, software, and cloud. How are sourcing teams recalibrating strategies to navigate this uncertainty?
There are many contractual protections that can mitigate tariff-related cost increases. The one thing to be mindful of is that sometimes these increases are justified – but many times they are not. And sourcing teams should be prepared for downstream cloud cost increases because cloud is not up in the sky, but rather a bunch of blinking lights, chips and metal somewhere in a datacenter.
Many software vendors are imposing renewal increases of 6–25% with little transparency. How should procurement leaders push back against this kind of pricing behavior?
Everything in IT contract negotiations begins and ends with leverage. Each meaningful renewal needs to have proper planning and preparation which includes usage measurement for SaaS, value received by the business, overlapping technology assessment, and of course, strong, robust market intelligence.
Cloud spending continues to surge while traditional data center investments decline. What does this shift reveal about how enterprises are modernizing their technology stacks?
This has been ongoing for a while. As cloud infrastructure became easier and ostensibly cheaper, so went the spending. But what happened is there were little controls on moving more and more workloads to the hyperscalers which subsequently caused an explosion of cloud spend.
With AI emerging as a game-changer in procurement, what are the most practical applications you see organizations adopting today to unlock real value?
Two big areas: AI for market research. Perplexity can build you a fairly accurate market landscape report. And two, there are some amazing AI tools to discover redundant technologies within your environment which is a great place to start for leverage with existing renewals and supplier consolidation. We utilize a couple of these technologies today for clients.
Supplier consolidation is clearly top of mind, with 82% of large enterprises reducing vendor sprawl. What advantages and risks come with streamlining to fewer strategic partners?
You have to first understand the full relationship you have with each meaningful vendor across your organization in order to aggregate that spend for volume discounts. And you also need to know what overlapping tech you may already have, if just for leverage. But a comprehensive rationalization effort is not for the faint of heart. Even after identifying redundant suppliers, be ready for a cross-functional discussion on the pros and cons of each consolidation target.
Price benchmarking appears to be gaining traction as a critical ProcureTech capability. What makes it such a powerful tool for managing vendor relationships and controlling costs?
As an IT buyer, you need to know the reasonable pricing for your committed spend. But for true world class outcomes, a price target is not enough. You need to bring analytical insights on licensing, vendor behaviors and ideal deal structures. There are a lot of ‘benchmarkers’ making bold claims. I have even seen VARs saying they benchmark IT deals, which is a bit absurd. And even with all the sources of market intelligence, the IT marketplace is still the wild west and is the least regulated and inefficient multi-trillion-dollar market ever to exist.
The workforce dynamic is evolving with more nearshore and offshore resources augmenting sourcing teams. How is this trend reshaping the structure and effectiveness of procurement organizations?
I find this evolution in global staffing intriguing. It is rare to find a well-staffed IT procurement team. So to afford the necessary sourcing throughput, we observe enterprises outsourcing IT procurement functions, not the whole department, but the lower value functions focused on less strategic vendors.
As enterprises look ahead to 2026 budgets, what are the three most strategic priorities sourcing leaders should focus on to balance cost control, flexibility, and innovation?
I believe every sourcing leader will be looking to re-assess their tech stack in 2026, even at the CPO level. The IT expense line item is just too large and critical to not make it a strategic priority. You need to have a proven, thoughtful approach on how to identify the biggest opportunities (which could also be called risk, if nothing is done about it) residing in your IT vendor portfolio. We are busy with our large enterprise clients providing predictive supplier pricing analytics to alert them of suppliers that are ripe for renewal price increases.
The next element is building leverage. Without it, you will fall victim to every tactic conceived of the marketplace. Leverage is not gun-slinging, but rather pragmatic analysis of your ROI received, actual usage, other options within your environment, clear accurate benchmarks, and countermeasures for tactics.
In addition, you must liberate budget dollars locked up in ‘run the business’ expenses that can be used for more innovative solutions available.
Jon Winsett
Chief Executive Officer, NPI
As CEO, Jon is responsible for defining NPI’s business strategy and driving the company’s growth. With more than 22 years of experience leading IT companies in the US and abroad, he fosters a success-oriented and accountable team environment based on trust, respect, commitment and comradery – all of which are instrumental to NPI’s success, and our clients’ success. Prior to NPI, Jon was VP of North American sales and UK Country Manager at Seagull Software, a publicly-traded enterprise software company. Jon shares his perspective on spend management as a frequent contributor to major news outlets such as CNN, Fox and CNBC. Outside of NPI, Jon is an avid boater and helicopter pilot, and an active participant in Atlanta’s philanthropic community. Jon holds a BS in Industrial Management from Georgia Institute of Technology.
