The Case for Vendor Diversity: The
Need for Change in Government
Technology and Procurement
Practices
Publication date:Commissioned byNovember 2021
Author(s):Tim Banting, Practice Leader, Digital Workplace
Matthew Short, Sr Director, Enterprise Consulting

Summary:
In our previous report, “Monoculture and Market Share: The State of Communications andCollaboration Software in the US Government” (see Further Reading), we asserted that Microsoft’s 85%
market share in office productivity software has caused a technological “monoculture” within the US
government. This lack of diversity limits competition and innovation and creates potential security anddependency risk.
In this report, we seek to answer two follow-up questions: First, what led to this overreliance on a single
vendor? Second, is the goal of public procurement processes—to obtain the best-value products andservices for both employees and taxpayers—being met?
We surveyed 250 managers, administrators, or C-suite level individuals responsible for technology
purchasing decisions in US national and state & local governments—and discovered three surprisinganswers:•Officials choose what’s easy for them: The top reason cited by respondents (57%) for selecting
a communication and collaboration partner was reducing work for their IT departments, calling
into question their responsibility to obtain the best value for employees and taxpayers. Some

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44% chose a “streamlined procurement process” that was “easy to buy from” as the mostimportant criteria. Price ranked dead last (39%).
•“Shadow IT” suggests an ineffective procurement process: The implications of “shadow IT”
suggest two clear trends: a) current tools are not meeting the needs of government employees,and b) current procurement procedures might be circumvented with bring-your-own tools that
could introduce additional security and compliance risks.

•Security breaches, excessive costs, and unreliable technology appear to be normalized:
Security breaches, cost overruns, and poor reliability were the top reasons for re-considering apartner relationship. And 45% of respondents had experienced security breaches, 42% had cost
overruns, and 34% experienced “solution failures.” Despite this, 41% of respondents continue tobuy from a single vendor.

While some technologies show a range of suppliers and an expected market distribution, officeproductivity is an outlier with Microsoft commanding a majority share. Such institutionalized inertia andcompliance complexities create a significant barrier-to-entry and deter competitive forces that help tomove the needle for innovation and best-in-breed solutions.

Officials choose what’s easy for themThrough our US government survey, we wanted to explore why certain vendors were chosen from aneeds perspective and understand IT’s requirements, particularly given that in 45% of cases whereIT departments make the final buying decision (see Figure 1).
Figure 1: What is your level of responsibility when it comes to communications and collaboration
solutions in your organization?

I influence
decisions related tothis, 25%

I am part of a teammaking decisions
on this, 30%

I am the final
decision-maker on
this, 45%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021

In terms of IT’s requirements, the top reason cited by respondents was “effectiveness at reducing
workload in our IT department” (57%). Understanding the IT department’s specific needs (50%), filling askills gap within the organization (46%), and streamlining the procurement process (44%) are additional
major contributing factors for IT departments opting for the path of least resistance. Indeed, the least

The Case for Vendor Diversity: The Need for Changein Government Technology and Procurement
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important requirement for IT selecting a communications and collaboration partner was the price (seeFigure 2.)
Figure 2: Which requirements are most important when selecting a communications and collaboration
partner?

Effectiveness at reducing workload in our ITdepartment

57%

Understanding our specific needs

50%

Redesigning organizational processes to takeadvantage of digitalization

47%

Ability to fill a skills gaps in our organization

46%

Streamlined procurement process (easy to buy from)

44%

Price

39%

Other

0%
0%

20%

40%

60%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021

To understand the broader needs of the organization we asked, “What business drivers are mostinfluencing your investment in communication and collaboration services?” (See Figure 3.)

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Figure 3: What business drivers are most influencing your investment in communication andcollaboration services?

Improve security of data

34%

Helping employees work in a more remote andmobile fashion
Extending communication and collaboration topartners, suppliers, and external agencies

32%
31%

Accelerating decision making

29%

Improving employee productivity

27%

Improving team productivity

27%

Reducing overall costs
Other

20%
0%
0%

10%

20%

30%

40%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021Improving the security of data, enabling a remote workforce, and collaborating with external agencies,
were the top three business drivers above improving productivity (both employee and team) andreducing costs. Omdia believes that while these drivers may reflect the need to react to recent COVID19 mandates at any cost, the current cultural emphasis on “compliance” vs. “innovation” continues tostymie productivity improvements within the US government’s use of communications andcollaboration software.
Furthermore, as IT is so influential in making the final buying decision, IT departments likely purchase tomeet their needs, rather than the broader business requirements of their organization. As the demandsof the organization often outpace IT procurement, this frequently leads to user dissatisfaction anddisaffection, especially when the technology does not solve the business need. This inertia usually leads
to an increase in “shadow IT,” wherein departments and employees procure and provision their own
applications to meet their specific requirements.

“Shadow IT” suggests an ineffective procurement process
Shadow IT is a growing phenomenon in the private sector, and Omdia believes that this also applies tothe US public sector as well, with employees and departments bypassing IT processes, bureaucracy, andgovernance, by leveraging their budgets to source their own solutions. As previously noted, (Figure 1)
our survey showed 45% of respondents were the final decision-maker on communications andcollaboration software with purchasing predominantly a unilateral IT process; however, 12% ofrespondents select their own solution to suit their needs (see Figure 4).

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Figure 4: Which best describes your organization’s unified communication and collaboration
purchasing process?
Decentralized - departments
research and select their own
solutions to suit their needs,
12%

Democratic - IT
department suggests
various options as part ofa team, 21%

Advisory - IT
department evaluate
solutions and provides
research on
investment decisions
to business units, 34%

Unilateral - IT department
determines need and makes
final recommendation, 33%© 2021 Omdia

Source: Omdia US Government Survey, October 2021

In terms of the top factors affecting the IT purchasing decision, reliability and regulatory/compliancerequirements were the top two factors; however, “user demand” (27%) was low on the list of priorities,
given IT claims to act in an advisory capacity (34%) or that they suggest options as part of a democratic
team (21%).
Any solution that is purchased needs to be reliable and meet government regulations and compliance;
however, the return on investment on which buying decisions are made is unlikely to be realized unlessthat solution meets the demand of users.

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Figure 5: What are the top factors affecting your purchasing decision?

Reliability

45%

Regulatory and compliancerequirements

35%

Strategic fit

33%

Functionality

30%

Breadth of solution

28%

User demand

27%

Ease of purchase

26%

Familiarity

22%

Innovative roadmap

22%

Relationship with partner

18%
0%

10%

20%

30%

40%

50%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021

As Microsoft typically sells through specific Office 365 Government plans, and bundles additional
capabilities, we believe inertia and opting for the “path of least resistance” is leading IT to force
employees to use tools that may not be fit for their needs, which in turn leads to an increase in shadowIT.
It is counterproductive to penalize shadow IT users; they are typically trying to help themselves where
they believe IT cannot. Easy-to-use and innovative tools are desired by government employees, despite
the centralized approach of IT procurement. To maximize the value from IT investments, government IT
departments should look to better understand the needs of their users and therefore gain buy-in fromtheir employees.
Finally, shadow IT applications and services are not centrally supported and lack integration with anorganization's established systems. Consequently, shadow IT constitutes an increased threat to security
and compliance as data will reside outside the established IT domain, oftentimes insecure, andunavailable to the rest of the organization.

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Security breaches, excessive costs, and unreliable technology
appear to be normalizedGovernment respondents said that solution failures, security breaches, and poor performance were the
top reasons they would consider switching vendors (see Figure 6).
Figure 6: What partner behavior would most cause your organization to re-consider its relationship?

Solution experienced failures, or worked
inconsistently

39%

Security breach38%

Solution performance was lower than expectations

33%

Lack of support for important digital products,
services or features

29%

Failed to provide adequate service and support

26%

Lack of innovation

25%

Concerns on partner’s financial stability

23%

Cost overruns21%

Poor interoperability with our other solutions

21%

Failed to bring new ideas or innovation

16%

Not responsive enough

16%
0%

10%

20%

30%

40%

50%

© 2021 Omdia

Source: Omdia US Government Survey, October 2021

And, as to be expected in a year tarnished by cyber-attacks and outages within the US government (andprivate sector), 45% of respondents reported a breach, 42% have had cost overruns, and 34% reported
product failures (see Figure 7).

The Case for Vendor Diversity: The Need for Changein Government Technology and Procurement
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Commissioned ResearchFigure 7: Which have you experienced with your current communication and collaboration solution?

Security breach45%

Cost overruns

42%

Solution failure

34%

Failed to meet ourexpectations

34%

Poor performance28%

Poor user adoption

28%

Poor service and support

22%
0%

10%

20%

30%

40%

50%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021

However, despite security breaches, cost overruns, solution failures, and failing to meet expectations,
agencies still responded that they prefer to buy from a single vendor (41%)— with less than a third going"best of breed," and just 28% buying a range of services from a range of vendors (see Figure 8.) Thisimplies that inertia and monoculture have been normalized.
Figure 8: When it comes to your communication and collaboration needs what is your favoredapproach?

We prefer to buy a range ofservices from a single vendor

41%

Best-in-class, single vendor
solution31%

We prefer to buy a range ofservices from a range of vendors

28%

0%

10%

20%

30%

40%

50%
© 2021 Omdia

Source: Omdia US Government Survey, October 2021

The Case for Vendor Diversity: The Need for Change
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The result of buying from a single vendor is greater vulnerability to large-scale data breaches (such asthe SolarWinds breach) and sophisticated nation-state-backed attack campaigns that recur withconsiderable regularity. Given that “helping employees work in a more remote and mobile fashion” isthe second most important business driver influencing investments in communication and collaboration
services (Figure 3), IT departments can no longer rely on the physical network perimeter of a secure
office building.
By buying from a single vendor, Omdia believes that the attack surface is too broad and thatorganizations expose themselves to significant risk and business disruption. A multi-sourcing strategy
that reduces the monoculture and helps to mitigate risks, be that a malicious attack on the vendor or
the organization, degradation in service, or outage.
Irrespective of the security and failures highlighted in Figure 6, and the layered protection (andredundancy) that a more varied choice of solutions could offer, 46% of respondents stated the mostnegative outcome of providing that diversity is in the management of multiple vendors and/or contracts(see Figure 9). Once again, this suggests a bias within officials to choose what is easy to manage, notwhat delivers the best results.
Figure 9: What are the most negative outcomes from having multiple communication andcollaboration solutions?

Managing multiple vendors/contracts

46%

Higher cost

34%

Hinders organizational agility

33%

High manual, repetitive tasks

30%

Siloed data

26%

Disparate architecture25%

No consistency across operational processes

20%

Poor user experience20%

Low integration between systems

19%

Low visibility across the organization

19%

We don't believe there is a negative outcome
from having multiple solutions

3%
0%

10%

20%

30%

40%

50%

© 2021 Omdia

Source: Omdia US Government Survey, October 2021

The Case for Vendor Diversity: The Need for Change
in Government Technology and Procurement
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Commissioned ResearchConclusion:
Based on the findings of our report, Omdia believes that US government IT departments are notobtaining the best-value products and services for both employees and taxpayers. Our survey suggeststhat IT departments are opting for the path of least resistance and reinforcing inertia (i.e., procurement
strategies remain unchanged despite problems and issues), in the US government. Furthermore, thisinertia, based on the assumption that bundled functionality inherent in Microsoft Office 365
Government plans is fit for the needs of the organization, leads to a “monoculture” that limits
competition, innovation, and productivity. Finally, those organizations that adopt a single vendor
strategy are exposed and at risk of various security vulnerabilities and disruption from service outages.

Author(s)Tim Banting, Practice Leader, Digital Workplace
Matthew Short, Sr Director, Enterprise Consulting
customersuccess@omdia.com

9Omdia Commissioned ResearchThis piece of research was co-commissioned by Google LLC and CCIA.

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Methodology
The Technology team at Omdia is the leading source of information, insight and analytics in critical areasthat shape today’s technology ecosystem—from materials and components, to devices and equipment,
to end markets and consumers. Businesses and governments in more than 150 countries around theglobe rely on the deep market insight we provide from over 300 industry analysts in technology sectors
spanning IT, telecom, media, industrial, automotive, electronics, solar and more. What sets Omdia’sEnterprise IT research Practice apart is our team of technical, experienced analysts, and our end-to-end
coverage of the industry.
••

The lead analysts that are the main contacts for our clients all have been in the industry forover two decades, have a technical background and a strategic mindset. This gives us theconfidence to say that we have the experience, training and skills needed to effectively help
you connect the dots, see all perspectives, and stay ahead of disruption.
The lead analysts are supported by a large team of primary and secondary research experts,
data scientists and specialists. We’re also more global and diverse than ever, located in 4

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countries, across time zones, communicating in 10 languages. Our rapidly growing portfolioof primary research is also helping us provide end-user perspectives and what is impacting
their purchasing decisions. In fact, it is hard to list all viewpoints our team can provide.
The survey was fielded by 250 respondents at the federal, state and local level who weredirectly involved or had direct knowledge of buying and selection criteria for workspace
productivity or communication and collaboration tools.

This report draws from Omdia’s interactions with numerous forward-thinking vendors, partners,
and clients on the future of work, plus Omdia research into the impacts and effects of theCOVID-19 pandemic on businesses and technologies. This report builds on Omdia’s research on
the digital workplace. It is based on discussions with service providers and technology vendors
and leverages existing Omdia research and data. Data derived from Omdia surveys and fromvendor press releases, virtual events, and briefings.

.

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