Major government tech contractors use vendor-lock to drive revenue: study

It was straight-up fraud. I passed it by a friend, who told me the deal. My time was billed on a cost-plus contract. I could have gotten in trouble for filling those out. By the time I figured it out, they stopped it.

No, I didn't get paid for it. Back then, I was a junior test engineer, and was getting paid peanuts (which was probably why they had me do it. I'm sure that the hourly rate for me was upped a wee bit). I wasn't working on any particular contract, myself, as we were sort of "floaters," at the time.

Organizations might not have the ability or money to hire an entire organization to build a product from scratch.

An upfront $200,000,000 bill is much harder to budget for than a 7-8 year $25,000,000 bill at an organization generating around $1 billion in revenue and with extremely low margins.

For most organizations, software is a cost center the same way HR, Payroll, and Accounting is within tech companies, so whatever limited money exists is better spent on their primary mission

Contracting out functions can work quite well, but the issue is organizations might not hire the right kind of management staff for techncial projects. Also, in most organizations IT/Infra falls under the CFO organization, and as such budgets are much smaller

Also, procurement rules are often written in such a way that it's often unfeasible for newer alternatives to compete simply because there is a massive upfront cost to meet RFP requirements.

Contrary to popular belief, enterprise sales doesn't want to target high revenue alone, you want to target high revenue PER dollar spent. If I made an efficient competitor to Cerner or Epic, why should I spend $50-60mil over 3 years to get FedRAMP qualified if the TAM federal agencies can provide me is maybe $100mil? For Cerner/Oracle and Epic, that $50-60mil isn't that expensive to provision because it can add additional lock-in or deal sweetners like other adjacent softwares or services getting discounted, thus making that $100mil into $130-150mil, or leveraging economies of scale to make that $50-60mil infra cost down to $20-30mil.

Money doesn't solve all problems, and unfortunately these health systems do not have the IT staff required to even hire competent engineering leadership and then build out dozens of teams required to in-house their EMR.

EMRs are incredibly complex, mainly due to all their integration points, billing systems, staffing etc.

You could ask the same of enterprises using Salesforce, AWS, or SAP. At a certain scale, it’s just not feasible to have the org consumed by technology. It’s much easier to solve problems by throwing money at vendors. Arguing otherwise is a nauseating consulting exercise that doesn’t guarantee cost, efficiency, or innovation improvements at the end of the day.