DSO Tech Standardization: Why the Winners Are Consolidating Now

The DSO landscape is going through a reckoning. For years, cheap capital rewarded DSOs simply for adding locations. That era is over, and in a recent episode of the Dental TeX-ray podcast, Alan Rencher, CTO of Henry Schein One, sat down with Kyle Surratt, founder of The Jetty Group, to talk through what separates DSOs that are thriving right now from the ones quietly falling behind. 

Surratt has spent the last five years helping DSOs build technology strategy, after coming into the dental space almost by accident in 2021. His read on the market, shaped by conversations with dozens of DSOs at every stage of growth, lines up with what Henry Schein One is seeing across its own customer base: the DSOs winning right now are the ones who standardized their technology before they were forced to. 

Here are the top takeaways from the conversation. 

1. Somewhere around 20 locations, "Susie and Joe in IT" stops working 

Surratt and Rencher both pointed to a familiar growth curve: from 1 to 10 locations, a DSO can usually get by on strong people willing to wear multiple hats, even without formal technology standards. Between 10 and 20 locations, things get strained but often still hold together. Past 20, it starts to fall apart without real structure. 

At that point, most DSOs face a choice: build an internal IT team or bring in a managed service provider (MSP). Surratt's experience is that outsourced IT tends to work well up to roughly 75 to 100 locations, often under a VP of Operations or COO, before organizations typically need to add dedicated IT leadership, like a VP of IT or CIO, and start building internal capability. 

2. Technical debt is the quiet killer nobody names  

Everyone talks about financial debt in the DSO world. Surratt's framing of technical debt was one of the sharper points in the conversation: a DSO that's grown to 100 locations without standardizing ends up running multiple practice management systems (PMS), dozens of different ISP contracts, and a patchwork of phone systems, none of it unified. 

The consequences aren't abstract. Technical debt shows up as IT costs that spiral out of control, inconsistent clinician and patient experiences location to location, and data that's scattered across disconnected systems, making it nearly impossible to get a clean read on the business. Rencher shared a live example: a growing DSO with seven different PMSs across 30-40 sites, unable to get a unified view of their own data, and, admittedly, having made poor business decisions as a direct result. 

3. Standardization now starts at the network 

It's tempting to think of DSO technology standardization as a PMS decision. Surratt's point was broader: real standardization starts with the network itself. A hundred locations with a hundred different ISP agreements, fiber structures, and security postures is a hundred small businesses loosely operating under the same name. 

From there, standardization moves through business continuity and network redundancy, HIPAA compliance, and, increasingly, communication infrastructure. Surratt specifically called out contact center centralization as a conversation that barely existed a couple of years ago and is now a standard part of DSO technology planning. 

4. Private equity is now requiring standardization 

One of the more concrete signals discussed was that DSOs today are increasingly required to standardize as a condition of investment or acquisition. Rencher described a DSO at roughly 30 sites, growing toward 70-80, actively welcoming standardization requirements as part of an acquisition because leadership already understood the alternative wasn't sustainable. 

Surratt connected this to a broader shift in the investor base: DSOs have drawn attention from PE firms that don't traditionally specialize in dental or healthcare. Those investors are asking the same operational questions any generalist investor would ask, and DSOs without clean, standardized data and technology are struggling to answer them convincingly. 

5. AI is not a strategy 

Surratt and Rencher both touched on the same metaphor: AI amplifies whatever’s already happening inside an organization. Clean, centralized data and solid operational process get amplified into better outcomes. Messy, disconnected data and broken process just get amplified into bigger, faster problems. 

Surratt's advice for DSOs evaluating AI was to start with a specific use case. His example was blunt and common: a DSO insisting they don't have a missed-call problem, until the data shows they're missing 40% of incoming calls. That's a use case. From there, DSOs can expand into other clearly defined problems, whether operational or strategic, rather than chasing AI for its own sake. 

6. The AI vendor landscape is heading for real consolidation 

Surratt described a recurring pattern with newer AI vendors: an attractive pitch, followed by a steep implementation cost, followed by the realization that the vendor is effectively using the client's own production environment to build and test their product. He expects meaningful consolidation in the AI vendor space within the next 12-18 months, with some vendors acquired and others simply disappearing. 

Rencher drew a parallel to the medical EHR market, where large platforms launching native AI tools have significantly reduced the viability of standalone third-party AI vendors. With Dentrix and Dentrix Ascend already serving a large combined base of dental offices, native AI features can reach scale in a way small, single-purpose AI vendors generally cannot match. 

7. The PMS is the hub everything else plugs into 

Surratt was direct about how he advises DSOs building out a tech stack: treat the PMS as the single source of truth for patient data and interactions, and evaluate every other tool based on how well it integrates into that hub rather than as a standalone decision. 

That's consistent with how Henry Schein One thinks about Dentrix Ascend's role in a connected DSO tech stack: the center that voice, communication, and AI-powered tools are increasingly built around. 

The bottom line for DSOs right now 

Neither Surratt nor Rencher framed this as hype. Their shared prediction is straightforward: DSOs that have already standardized their technology, centralized the right things, and cleaned up their data are positioned to keep growing and remain attractive to investors. DSOs that haven't are facing a narrowing window to catch up before the next wave of industry consolidation makes that decision for them.