As large businesses get to grips with trends such as mobile, social, cloud and big data, many are starting to move away from the traditional ‘mega vendors’, and engage with less familiar suppliers.
The advantage of this approach is customers have access to the agility and innovation of the ‘new guard’ of technology firms which have appeared on their radars in recent years, such as Apple, Amazon and Google.
But ditching the enterprise stalwarts such as IBM, HP, Oracle and SAP - and their armies of global support staff - in favour of firms that may have a history of consumer focus requires a significant change in mindset.
Speaking at a recent analyst event Gayla Sullivan, Gartner research director, outlined some of the best ways to deal with the changing supplier landscape.
“We are seeing that [the traditional suppliers] are disappearing a bit and being replaced by vendors that are a little more innovative, edgy and younger-feeling - they are the hip new crowd and they are starting to replace some of the old guard that has been out there,” she said.
“You need to be realistic and think: do you need the supplier in your environment as a necessity or just a desire. Are they really bringing something of value and bringing that innovation?
“Embracing who they are and working with them realistically is the way to go.”
New vendors, different problems
The ‘new guard’ of suppliers share a number of characteristics, which can have both advantages and disadvantages for those dealing with them. For example, they are able to be more agile than the established players in many respects.
"These are companies that don’t have a huge history of legacy baggage behind them, so they are able to be very entrepreneurial in working with their client base and with their plans for future platforms and innovation,” said Sullivan.
However, while there is a strong background of consumer service in most cases, dealing with these vendors is not necessarily any easier on an enterprise-wide scale.
For example, these suppliers are less open to entering into negotiations for a variety of reasons such as the low margins they might run on. As Sullivan points out, Oracle, SAP et al may not be renowned for their flexibility, but there is generally some room for movement during their contract talks.
Furthermore, support agreements are not as comprehensive as with the established suppliers, and sales teams tend to be smaller. This means that large customers used to engaging directly with the vendor may have to do business through channel partners.
"The global direct sales force – apart from AWS – is pretty much non-existent. We will see that the suppliers are focused on country-by-country approach. A global sales force for them doesn't make sense - they are all about the local relationship," said Sullivan.
And while the incumbent suppliers may have bent over backwards to meet the needs of customers, Sullivan warns that “throwing more money” at most of the new suppliers will not convince them to adapt their practices.
So, given these challenges, Sullivan revealed tips for how to manage relationships with the most disruptive players in the supplier landscape - namely Apple, Google, Amazon and Workday - and identified some of the potential pitfalls.
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