The Hidden Reason Your IT Guy Keeps Overspending | Jeremy Lichtenstein

Most businesses are overspending on IT — and don’t even realise it.

In this episode of Behind the Stack, we sit down with Jeremy Lichtenstein from Axiz to unpack the hidden reasons companies waste money on their tech stack — and how to fix it.

From overcomplicated infrastructure to underutilised systems, this conversation breaks down what’s actually going wrong inside modern IT environments — and why simply spending more isn’t the answer.

Powered by insights from Hewlett Packard Enterprise (HPE), we explore how smarter, right-sized solutions are helping businesses move from inefficiency to performance.

In this episode, we cover:

• Why businesses overspend on IT infrastructure
• The real reason companies over-spec their tech stack
• How unused tools silently drain your budget
• What happens in real-world IT buying conversations
• How to build smarter, more efficient IT solutions
• Where solutions like HPE Smart Choice fit in
• Practical advice for business owners and IT managers

Whether you're a business owner, IT manager, or decision-maker — this episode will change how you think about IT spend, infrastructure, and long-term scalability.

🚀 The truth?
The smartest businesses don’t spend more on tech… they spend smarter.

Transcript

SPEAKER_01 0:00

Most businesses are overspending on IT without realizing it. In this episode, we expose where it actually goes from. The smartest businesses don't spend more, but spend smarter. So, Jeremy, are businesses actually using all of the tech that they're paying for?

SPEAKER_00 0:28

In the 20 odd years that I've been in this industry, I can quite comfortably say no. Interesting. I suppose the industry's changed quite a bit because back in the day you needed to overprovision a little bit because you needed to make sure that your infrastructure could last you the next three to five years. There wasn't as much software available to collect the amount of data that you need to correctly scope an environment. Interesting. Whereas now there's so much information out there. There's so you can be so clever about scoping your solutions and just actually getting a proper feel for your day-to-day environment. So like whenever we need to go in and assist a client with their roadmap of figuring out the way forward, there's a lot of software that we'll run to collect analytics around what they're doing on a day-to-day basis. We'll typically run the software for about 30 days. Longer if they'll let us, just depends what the sort of timelines we have. But yeah, we want to get an overall picture of what's happening during the month. So obviously, during month end, the finance department's going to be busy. There'll be spikes with their ERP applications, and we want to know exactly what's going on. Unfortunately, today what we see is companies will, well, IT companies will take what you currently have because they know it works, they'll send us a spec and they'll say, quote us on the replacement of this. Right, no conversation. Yeah, exactly. And sometimes when we want to have the conversation, there's no interest because that's what works, that's what you're going to give us.

SPEAKER_01 1:58

And where where does that mindset come from? I think it's a big thing for a lot of companies. People we get comfortable and then it's like, okay, this is what works. Why do they stay in the comfort? And kind of how would you challenge that to their benefit to say, hey, maybe there is another way, or maybe you at least open the conversation.

SPEAKER_00 2:18

I think it's in a lot of cases they just don't know better. So I suppose that's something that we find in the distribution space, is just because we're sitting at the cutting edge, and it's part of our role is to educate our resellers, let them know what the latest technology is. And sometimes it gets quite overwhelming having to keep track with everything that's going on in the industry. So I think in a lot of cases, guys just want to know that what they're putting down is going to work and give them them and their customers peace of mind for the next couple years. But I suppose the advancements in technology that we see from when you built bought the kit five years ago versus what's available now, it's such a like leapfrog from what's happened in the past. It's actually you do and you don't need to be putting down that same level of kit just because of how much faster the replacement is. And yes, there's going to be new applications that you need to consider. Uh and maybe you do want that speed depending on what you're actually planning to do from an IT perspective. But to just go and make that massive investment, it's quite unnecessary. And I suppose this is also quite cool from HPE's side, is they've got a product called Green Lake. It's sort of like a flexible consumption model where you pay for what you use.

SPEAKER_01 3:36

And it's actually like you saving if if the consumers or the customer is saying, Hey, let me look at these options, there's genuine opportunity for them to save overall, or it's it all depends.

SPEAKER_00 3:50

So I suppose a good example I can give you is we're busy scoping a an upgraded solution for an ISP. So they do manage services where you'll rent the amount of virtual machine space, call it, from them. So what they did just from a budgetary perspective is they said to us, look, this is what we've got, quote us on the replacement just so we can see. Then we said, Cool, this is a like-for-like replacement. Obviously, it's a lot better than what you currently have, but it's comparable. It's like for like on a spec sheet. Sure. But then we said, Cool, let's run our analytics software so we can actually see what's going on in your environment. And what we ended up finding is that the average usage is pretty much half of what their kit is running at. Wow. But there are times in the month where they do have these spikes. And when those spikes happen, they need to make sure that those resources are available. So what we'd ended up scoping for them was perfect. It's like for like replacement, and they get that benefit of having what's it, the latest and greatest tech. But not paying consistently for it almost. So now with this model, they can agree to that minimum spend of what their like day-to-day operation is doing, but then they have enough capacity on site plus a little bit extra for those days that there's going to be a spike because maybe one of their customers is doing some crazy workload or it's just month-end processing.

SPEAKER_01 5:11

Um, so for I mean, for people listening, the the simple thing is to run the analytics, right? Like starting points, understand the environment, understand how much you're using it, and then what actually makes sense for you. And I guess that's the cool thing nowadays, like you said earlier. There's there's so much opportunity for scope, for growth, for change in different ways. It doesn't have to be hard set. There's there's flexibility, there's scalability with these things, which I think is cool. Why? I mean, what are some reasons companies are overspecing? I mean, I think we've spoken about it's all they know. What are why why are there other reasons? Do they think there's opportunity for growth because of that, or they just want it kind of off their to-do list? What like why why why over spec? Why overspend on on infrastructure in the first place?

SPEAKER_00 6:08

I think in some ways it's I mean, I don't want to take the malicious angle and say they want to make a quick buck on Saturday. Do it. I mean, there are obviously some providers out there that just want to make the quick buck and don't see the long-term benefit of having that relationship and getting the repeat business in five years' time of having more infrastructure. They're just focusing on, ah, cool, this is a quick win now. And I can quote an invoice. Exactly. I mean, from we typically see on a large infrastructure spend, it's generally like a six to two year, sorry, six months to two year sort of sales cycle. Right. Because we need to be spending the time looking at the environment, understanding what the needs, building a roadmap, figuring out what the like long-term vision of the client is. It's like it's not just about buying a server, it's about saying, where is your business struggling? Are you finding that on a day-to-day basis your staff are struggling to work because the network's slow, or they keep dropping off the Wi-Fi, or maybe they just need a slightly better laptop because you haven't actually considered what their real day-to-day needs are? So there's a lot that needs to be considered. I mean, the scope of a typical deal is huge. It's the hardware, software, networking, backup infrastructure, antivirus, firewalls. The list just goes on. So I think in a lot of cases, these systems are overspected to give a healthy bit of buffer. And is is there a place for that in your opinion, either way? There's pros and cons. I mean, look, back in the day when I was working in the reseller space, we I mean, this was probably like 10 years ago, which blows my mind to think about that. But I mean, we had phenomenal software running that I could look at my customers every month. We'd pull reports, we'd have a look at what the systems were doing, and we could sort of plan ahead and kind of know what was going on. Right. And back then we had to, I mean, before the the the in advent of these consumption models, we had to scope for the the three to five years of what's going to happen in the next time. Like and in a lot of cases, we'd get to that five-year mark and we'd say, actually, everything's fine, let's just extend the warranty for another two years and carry on going. But in some cases, we'd put down infrastructure, and I mean, it's still one of my favorite customers, but we stuck down this incredible infrastructure, and within I think two years, we had to do quite a major upgrade. And I sat down in front of the CEO and he's like, Listen, spend all this money. You said this is gonna last five years. Why do I have to spend more money? And I was like, Listen, buddy, your infrastructure, you your demands have changed quite a bit. We started this project, you had like 12 virtual machines, you're now sitting on 25. Right. Um, we have to add more memory, we have to add more storage. You've embraced the kit that we've stuck to. They were doing so much optimization in their environment, it was absolutely phenomenal to see how they embraced the technology. I mean, I mean, this was going from a server room with shelves and like sort of desktop style servers to we ripped it all out, stuck in a rack, like it was proper, like redundant aircons, UPSs, like made it into a real enterprise environment. I mean, no one ever sees this stuff, but when it breaks, yeah, we were the ones that had to deal with it. I wanted happen, I wanted happy customers. And it got to the point that they made that spend at two years in. When we got to the five-year mark, there was some kit that we just extended the warranty on, and there was a whole bunch of other kit that we moved into the dot the DR environment with disaster recovery, um, and then all the production kit we upgraded. But yeah, they were happy to spend because they knew that what we'd put down there actually worked.

SPEAKER_01 9:53

It worked, did what they needed. It was helping their business. Yeah. Going back a little bit, but speaking to like overselling or like maybe clients being like the end user being blindsided by not knowing what they should be doing or just getting a quote and kind of going ahead. I like I'd say in today's world, a lot of us we have access to information, we have AI, we have like, I would say we're a lot more knowledgeable than you would you would know better. 10, 20 years ago, I think there was you could get away as a salesperson with someone being ignorant. I think today's world, people like we can just put in chat, hey, does this make sense? And it's gonna tell us no, no, or it does. So I think, are you seeing that? Is that true? Is the market from clients like the whole channel? Is everyone more switched on and looking at these things and questioning or pushing back, or or people kind of not interested or or still somewhat ignorant?

SPEAKER_00 10:53

I guess it's a mixed bag of everything. Like you can get a lot of information out of, but it gives its garbage and garbage out. If you don't know what to ask it, you're not necessarily going to get the answer out that's relevant to your needs. Right. I suppose what you can say is there's nothing wrong with getting a second opinion. And this is also where the likes of myself and my colleagues come into the game. Because we're not coming to try and remove your IT provider from your environment. We're there to help. We want we want to make them shine. We want to help them to understand, listen, this is the latest and greatest technology. Maybe you've been too busy trying to service your customers, keeping the lights on, when instead, if the systems were just working the way you wanted them to, then you could be focusing on innovation, learning about UKID. And that's what that's kind of what our role is, is to make sure that we can go into an environment, assess where they kind of want to go, where they think is the way, and then just ask the questions about have they considered these other technologies? How much downtime can you actually afford in your business? Are you just spending this money because you've got budget available, or is this actually a a business need? Right. Um, you know, a great term I learned from my brother is you you have to focus on the bleeding neck. Because that's where the real struggles or the challenges are. And if you can address those, once you get that out of the way, then you start looking at the nice to have's and we as humans we get distracted by whatever's fun or exciting or we we like instead of the stuff we need to, like you say.

SPEAKER_01 12:28

So, Jeremy, as a senior technical sales specialist at Axis, how do you approach a customer? I mean, you've shed a a lot of light into it already, but I think you, someone out there that's needing help, whether it's a client, a reseller, what is your approach and and what should people know? Like if they're wanting to reach out to you or connect with you, yeah. What's what is what are your stages?

SPEAKER_00 12:56

So I guess first prize is getting your reseller to reach out to us directly because chances are they've already got a line into our business. Um, because more than likely we're supplying them on something. Or you can even contact us directly. Again, our role isn't to displace your existing company because we don't do IT services, so to speak. What's also cool is we can, I mean, we've got an entire field services division which can assist with deployments. So if you don't have the skills to do it yourself, we've got the teams in place that can actually help you with these new implementations. Awesome. Because again, there's so much tech, it's impossible to be on top of everything. I mean, myself and my colleagues, we often have a laugh about the fact of we just found out about something and we actually have no idea what's going on. You've got to learn it. And then it's like, oh wow, this isn't actually that bad. It's just it needs that time to well, I suppose, understand it correctly. So yeah, I'm not sure what the best way to contact us would be, but uhxis.com reach out to LinkedIn, you name it. Yeah, yeah, exactly. Stalk me on Facebook, LinkedIn, Instagram, uh, pick your platform. But I mean, what we would pretty much do is come in. Ideally, we'd want to be speaking to the C-level executives so that we can understand where's the business going? What are you doing with I mean, what's what's your goals for the business? It doesn't help me to give you a server. I want to know what you want to do with the server. Uh, where are your challenges? If you want to jump onto the AR bandwagon, what are you hoping to achieve from it? Because often companies will just pour millions of well, I suppose tens of thousands, if not millions, into software dev or infrastructure that they don't actually need, and then you've just got this white elephant sitting there that you've got nothing to do with. Hundreds. And if you just spent a little bit more time, didn't rush into it, really sat and understood your needs, you'd end up with a solid plan that you could grow on. I mean, that's that's the great thing about tech that's been scoped correctly, is you can always add on to it. If you put a box down that's too small, there's ways and means to expand it. Right. You're not stuck to that. You that you can do buybacks on certain systems that are not necessarily going to pay the full value, but there's lots of other ways that you can use the infrastructure so that your investment isn't wasted. Uh it's just about taking the time to understand it.

SPEAKER_01 15:17

And I I think that's it. Like the and and leaning on a guy like yourself and asking questions, setting up the time, leaning on your team to to at least understand. Like there's no there's nothing wasted from that exercise of like you're saying, understand, okay, a business's goals are this, this is what they're wanting to achieve, this is where they want to be. Okay, what's going to empower them and help them to do those things? I think it's a powerful thing to, in anything, I guess, in life, to take a deep breath, get the right people involved who know what they're doing, get help, don't just like I'm saying, run to Chat GPT and think that you'll know it all. So, where do solutions like HPE smart choice come in? With in light of everything we're speaking of, where what do they offer that that speaks to all of these things that that will help end user?

SPEAKER_00 16:12

So smart choice is HPE looking at the market internationally and saying these are the types of systems that a lot of companies are purchasing. And they'll then build a sort of baseline configuration around what they think would be best for businesses. And like smart choice is multiple uh SKUs. So whether you need an eight core, sixteen core, just to I mean, I don't like throwing speeds and feeds out there, but they there's various offerings available to fit your businesses' needs. And instead of having to go and scope something from the ground up, it's just a really cool starting point. And because they've put these bundled solutions together, you get that benefit of I suppose buying power. So they do the bulk purchasing, they're kind of keeping these systems in the warehouse ready for you at a great price, rather than having to pay premium because you want exactly that spec. When in actual fact we can probably just move you slightly over, and then you get the benefit of those savings.

SPEAKER_01 17:18

Yeah, so it's simple, it's cost effective, and it's good tech, I assume. Like the like for a customer that's gonna give them exactly what they need. So practical advice, again, with everything in mind to to business owners, to resellers, to to guys out there, what are some of your your things, like one or two practicals for for them to do or walk away with?

SPEAKER_00 17:42

First think about the value of your data, what it's worth to your business, what would happen to the business if you didn't have it, how much time you can actually afford to be offline. Because I mean, for some businesses, you can be down for a day, it's not gonna break the bank, so to speak. But in other cases, every second you're offline, you're losing millions. Um, and we see it like there's storage systems that are built that no matter what you do, you can hit that thing with a shotgun, it's not going down. Yeah, but obviously you pay for that. These things come at a hell of a premium, and it's just about making sure that you align the right tech to the actual needs. Yeah, so it's about looking at your business and saying, what are my needs? How long can I afford to be down? And I suppose have I considered every aspect of my environment? I mean, it doesn't help you go and spend all this money on your back-end infrastructure, but the endpoint that your that your um staff are using to access the system doesn't actually meet the requirements that they have on a day-to-day basis.

SPEAKER_01 18:45

And and would you, I mean, you said obviously earlier, like speaking top level, are the actual like end the the staff member using the stuff generally involved in the stuff? Because obviously it affects them, it affects their day-to-day, their like ability to perform or do the tasks that they need to do. Do you think they're involved enough in these processes or or not?

SPEAKER_00 19:08

That's actually a very good point. If you're not consulting the people on the ground and understanding what the struggles are, like there's no point. Hundreds. Because I mean, your CEO has an idea of the vision that he has for the business, but then he goes and buys a piece of software because of a report that he sees someone show him. And he thinks, okay, the software is going to solve all my challenges, but meanwhile, he doesn't consider the amount of clicks it's going to take for the person that's actually doing the task to get that output. Right. So it's all good and well you want this wonderful report, but maybe it's better off to keep your existing system and look at a different way to extract the reports. I mean, there's phenomenal ways you can API connections and it's just amazing how much data you can pull out of an existing system. So rather than ripping and replacing it, like speak to the people on the ground and understand where the challenges are. It's not just about what the what the CEOs or the the department managers. If you're not talking to your to the guys doing the grunt work, you could be making the wrong investment. And I do see that quite a lot. And guys will spend millions on new software packages, all the infrastructure to run it, but something as simple as two extra clicks to process a transaction, like that over a few hundred transactions in a day, the amount of time that wastes. I can't remember where I was someone gave me this little piece of information about think of the amount of clicks that you're adding to a process. And I get so frustrated now that I know about it, and you're aware of it. So now my goal is to make sure that I try and prevent this pain from happening to others.

SPEAKER_01 20:46

No, it's it's valuable stuff, important to again just understand it all. And that and that's the cool thing about tech, about all this data. There's there's a lot that can be dissected and then improved or better or changed. Jeremy, what an honor and privilege to have you on this episode. No, it's been a pleasure. Super, super insightful. Just any last words, anything maybe we haven't covered that is important to you or or you'd like to leave everyone with.

SPEAKER_00 21:18

I suppose don't be scared of the AR tools. Like I use them in my day-to-day work. It makes everything so much easier because, like I said, it's impossible to know everything. But you still have to have that baseline knowledge in some cases to know if the data you're getting out is actually correct. But yeah, it's just it's phenomenal to be alive in this time where we can actually have access to this amount of information. So, yeah, very grateful for that and to be in the in this role that I am. It exposes me to a lot of very different businesses and industries, and it's it's yeah, I'm excited to see where this industry is going. Awesome. Appreciate it. Thank you again. Thanks, Jade.