abandoned room with overhead lighting
Software buyers should create a shortlist based on their needs, not some predefined notion of what vendors are competitors PHOTO: Jonny Clow

Anyone who's spent time hanging out with software vendors and got them talking about their competition will inevitably have heard the phrase “if we see xyz competitor in a deal, one of us is in the wrong room.” 

When I heard the phrase for the umpteenth time the other day, it made me think — what is this room and who defines it? 

Clearly "the room" is the competitive landscape that a vendor finds itself up against. 

And this room is important because multiple forces are trying to tell you, the buyer, what you should or shouldn't consider when looking for a new solution. 

So let's dispel some myths.

Who Chooses the Competition?

The vendor does not define this room. In fact, I believe it's dangerous for a vendor to define for itself which theoretical room it should be in. Vendors don't always have the best perspective on what is the competitive landscape. 

So when a vendor judges who should (or shouldn't) be in their room, it often bases its criteria on “how enterprise” a solution is considered, crudely judged by price and the level of perceived budget available. 

An example from the web content management (WCM) industry would be if a client was looking at Adobe and Drupal. As Drupal is “free” open source and Adobe is a more considered investment, by that rational, someone is “in the wrong room” based purely on the criteria of price and perceived budget. 

And yet analysts consider Acquia, which is a Drupal-based cloud CMS solution, to be an enterprise solution. Gartner placed both vendors into the leaders section of its Magic Quadrant, so clearly it considers these contenders comparable. 

So the room is about more than a price point. 

Do Analysts Define 'The Room'? 

The example above suggests that analysts define the room and that’s really what industry analysts are for, to help the buyer navigate the marketplace. 

But I remember the rise of “Enterprise Content Management,” a designation widely considered to be defined by the analyst community. 

Lots of the marquee WCM vendors, like Vignette and Interwoven reinvented themselves to gain admission to this room, but the buyers didn’t show up. The buyers had remained firmly entrenched in the WCM room (to the delight of vendors like Sitecore).  

You shouldn’t always listen to the industry goldfish bowl to define the room.

Let Requirements Define the Room

The room is defined by the market need or the requirements of an organization. The buyer of the solution defines the room in other words. 

An analyst’s report may help you populate your room, provided that it judges the vendors by criteria that match your needs. 

(As an aside, when I was a Forrester client, they shared the spreadsheet that makes up their scoring, so you could assess how relevant their ratings were to your needs.) 

You may end up with a shortlist that appears counter-intuitive, but that’s OK — provided that shortlist meets your needs. 

However, the vendors on your shortlist may feel they are in the wrong room. 

Why Does This Room Matter? 

When you select a software solution you want two things: 1) for your shortlist to show up and 2) when they do, you want them to present the best solution. 

When a vendor thinks it's in the wrong room, it can qualify out or maybe not give your selection process the attention it deserves. It also might propose a solution that is either overblown or too simple due to its second guessing the competition it is up against. 

Remember, providing a proposed solution and showing it to you is not free for the vendor. The vendor needs to decide who to spend its sales dollars on. 

What can you do? 

Define the the room and be very honest on why you feel they are the right shortlist, including the budget.

While price point should not define the room, having some budgetary confines will help define its size. But your requirements define the room and it’s possible to have different solutions at different price points on the same shortlist. 

And yes, you should share your budget. It’s better to be as honest as possible rather than having the suppliers look for clues in your shortlist. 

Once, when working for a small UK CMS vendor, we found ourselves up against the big vendors in a selection process for a large pharmaceutical company. We could have easily concluded that we were in the wrong room. 

However, that client shared with us an incredibly detailed set of requirements (literally a thousand of them) and a clear, well-run selection process. With good client communication, we invested, won the business and delivered a very successful project. 

So the next time a vendor says “if we are in the room with xyz competitor, one of us is in the wrong room,” maybe they just didn’t read the invite?