Information Technology & Software
The category that grows fastest but gets reviewed the least.
THE SPEND
IT is typically the single largest indirect spend category for SMBs. According to Gartner, SMBs spend an average of 6.9% of revenue on technology — proportionally higher than large enterprises. For a $20M business, that’s nearly $1.4M annually flowing to software licenses, cloud services, hardware, telecom, managed services, and cybersecurity.
The challenge is that most of this spend is decentralized. Department heads sign their own SaaS contracts. Licenses auto-renew unchallenged. Cloud resources are over-provisioned. According to Spot by NetApp, the average SMB wastes 32% of its cloud budget on idle or over-provisioned resources — a staggering figure for businesses watching every dollar.
RISK FACTORS WHEN UNMANAGED
• SaaS sprawl: Duplicate and underutilized licenses across departments with no central visibility into what’s being used or spent.
• Auto-renewal traps: Multi-year contracts that renew automatically without competitive review, often with built-in annual escalators of 5–10%.
• Shadow IT: Employees and teams purchasing tools outside of any procurement process, creating security vulnerabilities and cost leakage.
• Cybersecurity underinvestment: Security is now a top-three spending priority, but many SMBs still lack a structured approach to evaluating vendors and coverage.
• Cloud waste: Over-provisioned compute, storage, and unused reserved instances draining budget with no monitoring.
SAVINGS OPPORTUNITIES
• Conduct a full SaaS audit to identify duplicate, underutilized, and overlapping tools across the organization. Companies routinely find 15–20% of licenses are unused or redundant.
• Renegotiate enterprise agreements with major vendors (Microsoft, Google, AWS, telecom providers) using competitive benchmarks and multi-year leverage.
• Consolidate vendors where possible — fewer suppliers means better pricing, simpler management, and stronger contract terms.
• Implement right-sizing for cloud infrastructure, matching resource allocation to actual usage patterns.
• Align contract renewal cycles to enable competitive bidding rather than passive auto-renewals.
WHY OUTSOURCED PROCUREMENT MATTERS HERE
Most SMB owners and operators don’t have the time, tools, or market knowledge to audit dozens of software contracts, benchmark pricing, or negotiate with tech sales teams who do this every day. A procurement partner brings vendor benchmarking data, negotiation expertise, and a structured review process that turns reactive renewals into proactive savings events.
Stillwater applies the same strategic sourcing discipline used by Fortune 500 procurement teams to your IT spend — at a fraction of the cost of hiring a full-time IT procurement specialist.