130 Tools, 20% Utilization, $71K/Year Lost Per Engineer - The Platform Sprawl Tax
The Platform Engineering Playbook Podcast​
Duration: 18 minutes Speakers: Alex and Jordan Target Audience: Senior platform engineers, SREs, DevOps engineers with 5+ years experience
đź“ť Read the full blog post: The $261 Billion Problem: Why Your Platform Engineering ROI is Broken (And How to Fix It) - Comprehensive written analysis with actionable strategies and resource links.
Jordan: Today we're diving into something every platform team faces but nobody wants to talk about—the economics of platform engineering. Specifically, why you're probably bleeding money on tools you don't use and metrics that don't matter.
Alex: We'll talk about the hidden costs of tool sprawl, why traditional ROI metrics are basically lying to us, and what actually matters when you're trying to justify platform investments to your CFO.
Jordan: Plus, we'll get into build versus buy decisions, what skills are becoming table stakes, and some practical steps you can take Monday morning to start fixing this mess.
Alex: So let me paint a picture that's probably familiar to our listeners. Small company: 15 to 20 tools. Medium business: 50 to 60. Large enterprise? We're talking 130-plus.
Jordan: And the kicker—teams are using maybe 10 to 20 percent of the capabilities they're paying for.
Alex: Right. There's this stat that keeps me up at night—engineers are managing an average of 16 monitoring tools. When SLAs get strict? That jumps to 40.
Jordan: Wait, 40 monitoring tools? How does anyone even manage that?
Alex: They don't. That's the point. It's this accumulation problem, right? Every team picks their favorite, nobody wants to migrate, and suddenly you're in what I call "tool sprawl hell."
Jordan: I've been there. We had three different APM solutions because each team swore theirs was critical. Turns out, they were all monitoring the same services, just differently.
Alex: And here's where it gets expensive. Global spend on security tools alone? Projected to hit 261 billion dollars by 2025.
Jordan: Billion with a capital B.
Alex: But the real cost isn't even the licenses. So first, there's the context switching tax. Microsoft research shows it takes 23 minutes to fully refocus after switching contexts.
Jordan: 23 minutes. And if you're jumping between 16 tools, that's almost 4 hours per day. For a 150-K engineer, that's 71 thousand dollars per year in lost productivity. Per engineer.
Alex: But wait, there's more. Remember that "cost-saving" custom monitoring solution your team built two years ago?
Jordan: Oh no, I know where this is going.
Alex: 20 to 30 percent of your team's capacity. That's the ongoing maintenance burden for self-built platform tools that people consistently underestimate.
Jordan: We had this exact situation with a custom deployment tool. "It'll save us money," we said. Two years later, we had two full-time engineers basically just keeping it alive.
Alex: And then there's my new favorite category—AI trust debt. Companies spent an average of 400-K on AI-native apps last year. 75 percent year-over-year increase.
Jordan: But I'm sensing a "but" coming.
Alex: Only 29 percent of developers actually trust the AI outputs. And 66 percent report spending more time debugging AI-generated code than expected.
Jordan: So we're paying premium prices for tools that create more work?
Alex: In many cases, yes. It's like we learned nothing from the low-code revolution.
Jordan: This brings us to something I'm really passionate about—why traditional ROI metrics are essentially lying to us.
Alex: Oh, this is good. Go on.
Jordan: So a platform engineering manager told me something that stuck: "What they mean by ROI is convince me that this change is going to have benefits we can represent as money."
Alex: Right, everything has to be dollarized.
Jordan: But here's the thing—what even is productivity in development? If we optimize for lead time, like DORA suggests, we might discourage engineers from taking time to do things right.
Alex: The Goodhart problem—when a measure becomes a target, it ceases to be a good measure.
Jordan: Exactly. I've seen teams game every metric. Lines of code? You get verbose code. Commit frequency? You get tiny, meaningless commits. Story points? Don't get me started.
Alex: So what metrics actually matter?
Jordan: IDC did this study—downtime costs between 500-K to over a million dollars per hour, depending on industry. That's your North Star. Everything else should ladder up to availability and recovery.
Alex: Platform teams that focus on this see real results too. 40 percent fewer outages, 60 percent reduction in incident management costs, 60 percent faster recovery times.
Jordan: And change failure rate—if it's over 15 percent, you're spending too much time fixing instead of shipping.
Alex: Let's tackle the elephant in the room—build versus buy. Because I keep seeing this pattern where teams think building their own will save money.
Jordan: Spoiler alert: it usually doesn't.
Alex: Well, there are exceptions. I know a company that saved 800-K a year moving off AWS.
Jordan: Sure, but what was their scale?
Alex: Exactly the right question. They were spending millions. For most teams, the math doesn't work out. There's this startup I worked with—they saved 20-K annually just by consolidating licenses. No custom building required.
Jordan: I think the threshold is around 5 engineers. Below that, you simply don't have the bandwidth for custom platform tools.
Alex: And even above that, the hybrid approach is winning in 2025. Buy the foundation, build the differentiators.
Jordan: Spotify does this brilliantly. They use standard tools for most things but build custom stuff for their specific music streaming challenges.
Alex: Speaking of alternatives, let's talk about some of the underdogs in this space. Because not everything has to be Kubernetes.
Jordan: Thank you. The Kubernetes complexity backlash is real.
Alex: For teams under 5 engineers? Look at AWS App Runner, Fly.io, even good old Docker Compose for development.
Jordan: We've also been seeing Nomad gain traction in specific use cases. It's like Kubernetes but with 80 percent less cognitive overhead.
Alex: And for the "I just need to run some containers" crowd, Railway and Render are doing interesting things.
Jordan: The key is matching complexity to actual needs. You don't need a Formula 1 car to go to the grocery store.
Alex: So given all this economic pressure, what skills should platform engineers focus on?
Jordan: Financial literacy is becoming table stakes. You need to speak CFO.
Alex: FinOps certification might actually be worth it now.
Jordan: Also, product management skills. The most successful platform teams think like product teams. User research, continuous discovery, measuring adoption not compliance.
Alex: What's losing relevance?
Jordan: Deep expertise in any single tool. The ability to learn and consolidate tools quickly is worth more than being a Jenkins wizard.
Alex: Harsh but true. What about emerging skills?
Jordan: Platform as a Product thinking, cost optimization automation, and honestly? The ability to say no. To new tools, to complexity, to features that don't move the needle.
Alex: Let's get practical. If I'm a platform engineer listening to this, what do I do Monday morning?
Jordan: Tool audit. List everything, map actual usage versus licenses, calculate true costs including training and context switching.
Alex: And be honest about that usage. We found teams claiming they "needed" tools they hadn't logged into in six months.
Jordan: Then identify your biggest overlap. Monitoring is usually the worst offender. Do you really need Datadog AND New Relic AND Prometheus AND CloudWatch?
Alex: Pick one area for consolidation. Just one. Prove the value, then expand.
Jordan: And start measuring differently. Track incidents reduced, recovery time improved, developer satisfaction. Connect these to dollar values.
Alex: Most importantly—involve your developers. If they bypass your platform to use their own tools, you've already lost.
Jordan: You know what struck me while preparing for this episode? We've created this entire industry around managing complexity we created ourselves.
Alex: It's like Conway's Law, but with tools. Every team adds their favorite, and suddenly you're spending more on tool management than actual development.
Jordan: The fundamentals of good engineering remain constant, even as the landscape evolves. And here's the takeaway: the best platform is the one your developers choose to use, not the one you mandate.
Alex: Consolidation is coming whether we like it or not. The economics simply don't support 130-tool portfolios anymore. Start with one area, prove the value, and expand from there.