February 8, 2025

Optimise your software budget with the cloud, OS, and more

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By Oluwafiropo Tobi Ogundare, Territory Sales Lead for Mauritius and West Africa at Red Hat

In an effort to digitally transform their business models, enterprises across Nigeria and other parts of West Africa are turning to software to expand their technical capabilities, unlock new revenue opportunities, and integrate new technologies into their day-to-day operations. As a result, IT budgets are evolving to account for increased spending on software across all departments.

This is a sizable priority for both public and private sectors. For example, according to the government-owned enterprises’ (GOEs) budget for 2024, recently released by the Ministry of Budget and Economic Development, the Nigeria Deposit Insurance Corporation (NDIC) and Federal Inland Revenue Service (FIRS) plan to spend a combined N8.7 billion ($5.49 billion) on software alone. This, as they and other GOEs work to leverage technology and build more customer-centric organisations.

As organisations invest in software, there is a need to scrutinise how much they’re getting out of those investments. How can organisations optimise spending for the best solutions and results possible?

The risk of Unnecessary Spending
Gartner estimates that worldwide IT spending will total almost $5 trillion in 2024, an increase of 6.8% from the previous year, with software spending increasing by 12.7% to just over $1 trillion. This increased spending is a result of IT no longer being a background business operation. Instead, it is now both customer-facing and revenue-producing. IT now plays a greater role in organisational and overall growth strategies.

However, with greater priority comes greater risks. Enterprise software subscriptions, which often form the bedrock of an organisation’s IT infrastructure, can result in detached software portfolios. This can lead to organisations not having complete visibility over their subscriptions and license duplications, which can then cause unnecessary spending.

Nigerian businesses, especially small and medium enterprises (SMEs) that are regarded as key drivers for the country’s economic growth, simply cannot afford for this to happen. Fortunately, with so many businesses now migrating to the cloud, they can benefit from an environment that offers and enables complete oversight over their infrastructure.

Cloud adoption and committed spend
When it comes to the question of money, cloud computing lets enterprises avoid a large, upfront cost of owning and maintaining their IT infrastructure. As cloud adoption continues to accelerate across Africa, businesses are seeing the value of partnering with cloud providers for everything from basic storage to hosting complex applications. This is where committed spend comes in. In exchange for their customers committing to pay an agreed-upon amount for a specific term, ranging from 12 months to multiple years, cloud providers may offer solutions and services at a discount.

How this relates to software spending is that many cloud service providers will extend committed spend discounts to customers when they purchase solutions through the provider’s individual marketplaces. Not only does this immediately alleviate concerns about what solutions may be operable with the cloud, but it also enables organisations to save money and partner with third-party vendors that offer a trusted and reliable product.

Furthermore, customers can partner with vendors that offer a full ecosystem of products that make up modern IT architecture, and who allow their customers to combine subscriptions and monthly-on-demand purchases. The result is maximised flexibility and agility, the characteristics of any successful business.

OS is a good place to start
In the past, an operating system (OS) was just part of enterprises’ infrastructure. It was the way an organisation could interact with its hardware and peripherals. Today, in the age of cloud computing and cloud-based infrastructure, OS helps facilitate a resilient and flexible environment and acts as a proxy for an overall view of what organisations’ architecture needs to be. In short, OS defines the overall operating environment.

Crucially, OS provides standardisation across an organisation’s entire environment. This allows IT teams to deploy new systems, automate existing processes, and manage application lifecycles without having to worry about interoperability issues and ensure harmonious efficiency. This is incredibly valuable from a cost perspective, especially when you’re able to standardise and simplify. It’s also worth mentioning the cost benefit of open-source OS compared to closed source, as they are typically less expensive than their proprietary counterparts.

This is just one component, but it’s one that sets the stage for enterprises to get a tight grip on their infrastructure and effectively facilitate digital transformation and growth. OS subscriptions can give businesses instant control over their expenses and open the door for them to oversee and optimise their software spending. The future will be fuelled by software, and it’s up to West African enterprises to take heed.

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