Selling to the Enterprise – Best-of-Breed vs. Suite Customers

Here is something risky: a self-described non-sales-person is going to write about sales. I grant myself a little license, since it is about selling to the exact role I played as a buyer in enterprise IT shops for a decade.

There are hundreds, if not thousands, of companies that have failed due to their inability to sell to, or are currently frustrated trying to sell to, enterprise IT shops. I speak not of those with miserable products, or poor financing, or subpar executive teams. Many of these companies have good to great management, enough funding to last, good salespeople and products that are, at the very least, much better than competitors, if not truly innovative.

Much ink has been spilled explaining that it is is not just the product, but the ecosystem of partners and complementary products around it that make a product compelling. All of this is true. Others have written extensively that the market positioning, pricing (sometimes too low to get credibility) and packaging must be correct, or that companies want to see viability in their vendors. All of this is also true. What is often missed is that even with all of the above in place, sometimes companies fail because they do not take into account the types of customers.

In the enterprise, there are two competing corporate IT cultures. One is “Best-of-Breed”; the other is “Suite”.

Best-of-Breed companies look for the best solution for their problem. They want their issues solved in the best way, and are willing to manage multiple vendors and purchasing arrangements, and the internal or consultant integration to make the various products play nicely together. These were the companies who bought Micromuse Netcool, merged it with SystemEDGE agents, added some other company’s products for monitoring databases, a different one for firewalls, etc. All of these product were the best at the time, and required real work to integrate.

Suite companies are looking for a single deal. They recognize that the single CA or IBM system for which they paid $10MM is not the best, and will leave some gaps. But it will be a single big deal, it will be a single integrated system largely out of the box, there will be one vendor for support, and they are done.

Best-of-breed companies are structured to make deals flow more quickly, have better contract and vendor management to handle the many deals, and have good in-house integration engineers, who get to know the guts of the products really well, to pull the pieces together. Suite companies take a lot longer to close a deal, with more purchasing and legal involvement, have fewer integration engineers, relying more heavily on consulting firms.

And this is the crux: innovative new companies have a better mousetrap. It may really solve the issues in a better fashion for many, if not all, of these companies. But if you are selling to a suite company, you are doomed from the get-go. You may find a VP who is more innovative and willing to drive through best-of-breed, but they are a rare breed (I was one at Deutsche Bank for several years), and the culture squeezes them out. If you want to sell the best point product out there, you must sell to best-of-breed companies. If there are not enough, well, either don’t go into this business, or look to get acquired by such a suite company.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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