New NPI Research Reveals How AI, Vendor Consolidation, and Rising Costs Are Reshaping Enterprise IT Sourcing in 2025

Benchmark study identifies market dynamics that are transforming enterprise IT procurement strategies for large enterprises

ATLANTA, June 26, 2025 /PRNewswire/ -- Enterprise IT procurement leaders are navigating a fast-changing sourcing landscape marked by vendor consolidation, AI acceleration, rising software costs, and evolving organizational models, according to a new benchmark study from NPI. The State of Enterprise IT Sourcing in 2025 draws on insights from IT sourcing leaders at organizations with $5 billion or more in annual revenue.

"Large enterprise IT buying is being redefined in real time," said Ken Male, Founder of CXO Nexus, who led the research for NPI. "Sourcing leaders face a rare combination of pressures – from cost containment mandates and AI-fueled contract complexity to the dominance of a handful of major vendors juxtaposed with the proliferation of tail spend. Peer intelligence is playing a bigger role than ever in helping organizations benchmark and adapt."

The Vendor and Reseller Estate: More Vendors, Growing Complexity

Although 66% of enterprises concentrate 80% of IT spend with just 25 or fewer vendors, vendor sprawl persists. 82% are actively pursuing supplier reduction to eliminate redundancies and simplify management. Microsoft and AWS top the list of vendors easiest to work with, while Broadcom/VMware is most vulnerable to decommitment.

Software vendors have become procurement's biggest pain point, with licensing complexity and lack of vendor responsiveness cited as top challenges. Many report renewal increases of 6 to 25% with little justification. Direct vendor purchasing dominates (83% of spend), but the distinction between resellers and cloud marketplaces is blurring.

The ProcureTech Stack: Control, Consolidation and AI on the Rise

Enterprises are investing heavily in ProcureTech to better govern complex supplier estates. NPI's ProcureTech Heat Index™ highlights which technologies are primed for net new adoption over the next 18 months. SaaS Management and IT Asset Management lead adoption, while Price Benchmarking remains the most widely deployed solution delivering strong ROI.

AI-driven automation is poised to transform procurement workflows, particularly onboarding, contract management, and spend analytics. Many believe AI could automate up to 80% of onboarding tasks, freeing procurement teams to focus on higher-value work.

IT Category Spend: Software and Cloud Continue to Dominate

Software and cloud remain the largest growth areas. Over 70% of respondents plan to increase application spend, while 63% expect to reduce data center investments as cloud migration accelerates. Notably, 83% of IT spend is tied to existing vendor renewals. Telecommunications spend continues to decline as SD-WAN adoption replaces legacy networking.

IT Procurement Staffing: Evolving Org Models and Global Resourcing

Of those interviewed, 40% report using nearshore/offshore talent to augment IT sourcing teams, with Mexico and India leading deployment. The primary drivers are access to skills, not just cost savings. Just over 50% of respondents favor centralized, category-based sourcing structures, especially at the macro level. A growing number also report improved alignment with line of business (LOB) stakeholders, a shift that's gaining momentum across enterprise sourcing organizations.

Harnessing Community Insights for Enterprise IT Procurement

The State of Enterprise IT Sourcing in 2025 is part of NPI's ongoing commitment to equip IT procurement leaders with real-world peer intelligence. As part of a broader set of community-driven initiatives, NPI partnered with a third-party to capture candid insights from sourcing executives navigating ProcureTech adoption, vendor consolidation, and sourcing transformation. The result is actionable intelligence grounded in the shared experiences of large enterprise buyers.

"This research highlights a critical inflection point for enterprise IT sourcing," said Jon Winsett, CEO of NPI. "A small group of vendors now controls most spend, even as the long tail continues to expand. AI and cloud are accelerating this. Procurement leaders must adapt quickly. That means tapping into peer insights, smarter tools, and stronger negotiation strategies to stay ahead."

Download the full report here.

About NPI
NPI is the premier provider of data, services and tools to help large enterprises identify and eliminate overspending on IT purchases. NPI delivers transaction-level price benchmark analysis, license and service optimization analysis, and vendor-specific negotiation intel that enables IT buying teams to drive material savings and measurable ROI. NPI analyzes billions of dollars in spend each year for clients spanning all industries that invest heavily in IT. NPI also offers software audit, audit defense, and asset management services. For more information, visit www.npifinancial.com and follow on LinkedIn.

Contact: Hannah Bower, [email protected]

SOURCE NPI