Apple, Firefox and Oracle: Are Non-enterprise Vendors Too Risky?

Rob Enderle

This last month, largely because of the unprecedented move Oracle made by pulling Itanium support from HP hardware, I've been thinking of what really makes up an enterprise vendor. I ran into an online exchange between an IT guy and a Mozilla (Firefox) director and it is clear that Mozilla doesn't even want to be an enterprise vendor (Microsoft's response is worth reading). Apple has no desire to be an enterprise vendor and it is the company of the last decade. You don't have to be an enterprise vendor to be successful, but if you are an enterprise and you are buying from a non-enterprise vendor, you are taking on some responsibilities and risks that should be understood or you may regret your decision.


I have, however, come to the conclusion that Oracle is no longer an enterprise vendor and that it won't let the gap be bridged. Let me explain.


What Makes for an Enterprise Vendor?


For me, this is a particularly interesting question and it was first put to me in my early days as an analyst. Back then, there was a software vendor called Cheyenne Software and it was trying to become the business solution for anti-virus. Its CMO had me, a guy from the Gartner Group and a guy from Meta (now part of Gartner) on a panel and he told us ahead of time that he was going to ask if Cheyenne was an enterprise vendor. I told him no, an enterprise vendor has to be wrapped by a level of services and trust that companies of Cheyenne's size and scope simply didn't have. You needed an Oracle-, IBM- or HP-like firm to truly scale to the requirements of an enterprise. At the core of this was trust, and trust comes from the belief that an enterprise vendor understands the unique needs of a very large company and has the resources to fill those needs. Cheyenne met none of these requirements, and it seemed doubtful it ever would unless it merged with another company or was acquired.


Well, the CMO got me in front of a large audience, in front of TV cameras seated with my peers and made it clear that we would lose his account if I didn't say he was an enterprise vendor. He asked me the question. I gave him the answer I told him I would and he then, as my Gartner and Meta counterparts, who, looking relieved, agreed with me. I'll never forget the look of the Meta sales rep, who owned the account for that company, sitting in the front row. She appeared to want to rip off my head.


Advantages and Disadvantages of Being an Enterprise Vendor


There is a lot of allure to becoming an enterprise vendor. The deals are massive and can easily reach tens and hundreds of millions of dollars. One deal, to a small company, could exceed their normal annual revenue by several times. However, enterprises tend to get massive discounts. They put in most-favored-nation clauses in contracts that pass through deep discounts. Because these clauses are often ignored and the contracts are very complex, the agreements are often audited for compliance by folks who don't have a sense of humor for companies that don't comply with them (I used to be one of these auditors and found millions of dollars in overcharges).


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