Consolidation suggests reduction, but not necessarily unification. An enterprise might cut the number of applications it runs, reduce the number of vendors it buys from or move some work onto a shared platform. It might also keep specialized tools where the business needs them.
Those approaches can serve similar goals: streamlining operations and workflows, saving money and getting more from existing IT investments. But the way an organization gets there depends on what it finds when it looks at its software portfolio as a whole.
That's what makes recent Futurum research interesting.
A May survey of 830 IT decision-makers found that 41% planned to reduce or consolidate their application counts. Nearly two-thirds favored a mostly-platform procurement strategy. But Futurum's October spending research found little corresponding movement toward the major software suites, even as spending momentum weakened across the enterprise applications market.
"Consolidation is happening, but most of it is not flowing to platform suites," Keith Kirkpatrick, vice president of research at Futurum, told TechTarget.
The surveys asked different groups about different decisions. But their findings raise an interesting question: When CIOs say they're consolidating software, what does that actually mean for the business?
One goal can lead to different decisions
An application portfolio assessment could lead to some combination of retirement, replacement and consolidation. It might also reveal applications worth keeping.
Asked whether organizations were simplifying their software portfolios, Kirkpatrick said that was happening to some extent, but much of the activity involved switching vendors.
Futurum also found that organizations pursuing consolidation were almost evenly divided between replacing individual applications with broader suites and replacing them with other specialized products. A smaller group was considering AI-based alternatives.
Swapping one application for another might improve capabilities, pricing or integration without reducing the number of applications. Moving several functions onto an existing suite might reduce duplication while increasing spending with the remaining vendor.
One ServiceNow customer, for example, reported increasing spending on that platform while reducing reliance on Jira as workflows moved.
So application count, vendor count and actual operating costs may tell different stories, even when the organization is pursuing the same larger business objective.
Standardization has its limits
Ricoh Europe, the regional arm of the Japanese printing and digital services company, offers an example of how those approaches can work together. As Ricoh expands its services business and brings acquired operations together, CIO Nick Pearson is working toward more common back-office systems through the company's One Ricoh initiative.
That makes sense. Acquiring businesses creates a need for some commonality in how they operate, share information and support employees.
But Pearson also recognizes that one ERP system isn't necessarily the best choice for every part of the organization. He's pursuing a dual ERP strategy that retains Oracle while leaving room for other options as business needs dictate.
"We want to offer choice," Pearson told Computer Weekly.
That flexibility introduces its own costs and complexities. Different systems still have to exchange information and be supported. But an evolving business model and regional differences can make those choices worthwhile.
In other words, understanding the software portfolio means understanding the business requirements behind it. What works for one operation may not work nearly as well for another.
Consolidation is happening, but most of it is not flowing to platform suites.
Keith Kirkpatrick
VP of research, Futurum
A 2025 Boston Consulting Group study found that companies favoring specialized, best-of-breed applications were actually more likely to anticipate vendor consolidation than those favoring suites. The research, partially funded by SAP, also examined how organizations combine broad platforms with specialized capabilities.
The money isn't moving in one direction
Kirkpatrick's October research adds another complication.
Futurum's Enterprise Apps Net Score — which weighs plans to adopt or increase spending against plans to decrease or replace software — fell from 16.4 in October 2024 to 9.6 two years later. Spending momentum weakened across most of the applications tracked, with smaller and departmental products facing more replacement pressure.
Yet the major suites' share of positive spending intentions barely changed over that period.
"Buyers are planning consolidation faster than they are funding it," Kirkpatrick explained.
There's more than one reason that could be happening. Contracts renew on their own schedules. A platform-centered strategy doesn't require every application to move onto that platform. And assessing the portfolio may lead a company toward different purchasing and replacement decisions than originally envisioned.
AI adds another wrinkle. More organizations are funding internal AI development from broader IT budgets, where those investments can compete with traditional software purchases.
A company could retire a licensed application and build an AI alternative. But somebody still has to operate, secure, maintain and pay for the new capability. The old software bill might disappear while some of the work and its costs move elsewhere.
Even when an enterprise reduces its application count, its financial and operational results may take longer to become clear.
Getting to one system isn't the finish line
Hewlett Packard Enterprise illustrates another part of the equation.
HPE consolidated more than 20 ERP systems onto a single SAP instance while also moving to private cloud infrastructure. That's a substantial undertaking, and completing the consolidation was a significant technology milestone.
But when CIO Rom Kosla arrived in 2023, there was still considerable work to do.
In a Computer Weekly interview, Kosla described HPE's broader IT environment as handling a couple of million support tickets for approximately 60,000 employees. He wanted to reduce that volume by 85%.
The ticket volume was a problem in its own right. Employees dealing with IT problems aren't spending that time serving customers or doing their jobs.
The next challenge is deciding what changes will serve the business — and whether those changes deliver. Consolidation isn't an end unto itself.
Kosla's priorities went further. He wanted HPE to issue customer quotations faster, price products more accurately, close financial books more efficiently and improve supply-chain operations.
The experience illustrates something CIOs need to account for: Completing a major consolidation and achieving the intended business benefits can be different milestones.
Some improvements can happen along the way. Others require continued work after the systems have been combined. Even a well-planned effort can bring unexpected problems.
Four questions to ask about software consolidation
What does the organization want to accomplish? Lower costs, simpler workflows, fewer applications or vendors, better capabilities or some combination? Understanding the business goals helps determine what a successful outcome should look like.
What does the portfolio assessment reveal? Look across the entire software environment, including duplication, integrations, contracts, costs and the business functions the applications support. Some applications may be more valuable than their usage numbers suggest.
What changes make the most sense? Retire some applications, replace others, consolidate where common systems make sense and retain specialized tools where the business needs them. The assessment might suggest a different approach than originally planned.
What actually improved afterward? Did the organization end up with fewer applications or vendors? Did costs fall, including the expense of integrations, replacements and support? Are workflows easier and employees better served? And where the portfolio didn't get smaller, did the business gain enough to justify the changes?
The goal is a software environment that better serves the business, whatever combination of changes gets it there.
What actually improved?
CIOs understandably enter consolidation efforts with goals. They might want fewer applications, fewer vendors, lower costs or simpler operations.
But what an assessment reveals about the entire software environment can point toward a different combination of retirement, replacement, consolidation and retention. That doesn't mean the original goals were wrong. The organization may simply have learned more about how best to achieve them.
The results deserve a broader look than application or vendor counts. Lower costs and less duplication matter, but so do better workflows, reliable systems and the ability to adapt as business needs change.
Better information about software usage, contracts and ownership helps CIOs understand what they have. The next challenge is deciding what changes will serve the business — and whether those changes deliver.
Consolidation isn't an end unto itself.
CIOs may work in technology, but in the end that technology has to serve the business and the people who depend on it. The real measure of consolidation is what the organization gains from the changes, not simply what disappears from its software portfolio.
James Alan Miller is a veteran technology editor and writer and Lead Editor for CIO News at Informa TechTarget. He directs coverage of enterprise technology strategy, AI, software, data, infrastructure and the decisions shaping how CIOs manage increasingly complex IT environments.
