The rise of the new software vendors - Organisations can now choose between best-of-suite or the newly emerging best-of-breed software companies.
Best-of-suite - When businesses use traditional all-in-one applications that cater for their full variety of needs.
Benefits & drawbacks of best-of-suite - Best of suite has been losing market share over the years.
Best-of-breed - Best-of-breed allows businesses to pick and choose applications that best fit their specific needs without being as costly.
Limitations of best-of-breed systems - With information fragmented and lost in different applications, efficiency and communication isn't optimised.
Our take - Given the fast-innovating and rapidly accelerating best-of-breed software, integration is key to improve efficiency.
Over the past ten years, a tech trend has shaped the future of work: the rise of software vendors. According to IBIS World, in 2012 there were around 5k software vendors in the U.S, in 2022 there are now over 15k, representing a 200% increase. What does this mean? Organisations are now spoilt for choice when selecting the best software.
The software publishing industry refers to vendors that develop applications to be published via licences. These licences give customers the right to use the software on their own computers. The industry is worth over $400 billion and has forced companies to reconsider what technology and applications they should use.
Traditionally, companies have relied on a best-of-suite approach to their selection of applications and handling of information. However, with the vast number of innovative, sophisticated and specified software vendors available today, companies have begun to move to a best-of-breed approach.
According to a report by Okta, 77% of businesses that used Microsoft 365 as their best-of-suite system, also used other best-of-breed apps within their company. 38% also used Google Workspace, 33% used Slack and 45% used Zoom.
One thing is very clear: best-of-suite vendors are struggling to keep up with the new and innovative software vendors. The fastest growing apps are from best-of-breed players and as Okta reported, they’re coming in hot. Notion, TripActions, Postman, Figma, Miro. The list goes on.
What has inspired this shift? What are the meanings of best-of-suite and best-of-breed? How can your company successfully take the right approach to vendor selection? We’ve broken it all down for you.
Before diving into the future of how companies operate, let’s focus and define the meaning of the traditional approach to vendor selection: best-of-suite.
Best-of-suite software vendors are all-in-one, large-scale software applications that offer a variety of solutions for your business needs via modules and applications.
Companies pay for this all encompassing solution, investing in one single vendor, allowing them to access one central source for all their applications, data and information.
An example of a top best-of-suite vendor would be Microsoft 365. When you subscribe, you get access to their well known apps such as Microsoft Word, Excel, Powerpoint and OneDrive. You also get less well known but useful apps such as Viva and Project. The suite also offers business tools via modules, like MS Teams for communication and Sharepoint for collaboration.
When users are familiar with one interface, it makes it easier for them to use the different applications included in the suite.
With one vendor, you only need to train your employees on how to use that specific software. This saves time and money.
Best-of-suite systems are designed to work together, so you can be confident that the applications will integrate with each other seamlessly.
With vendor selection, one size often does not fit all. The lack of flexibility and customisation is a real disadvantage. Companies have individual needs and best-of-suite vendors do not cover the nuances required. This will lead to outsourcing and paying for other applications to meet those needs.
A lot of best-of-suite systems take a long time to be implemented into a large company. For some this can take years, depending on the size of the company.
This can impact your company by leading to a lot of wasted time that could be far better spent productively working within your company. It can also lead to a backlog of inaccurate data as it can become harder to keep things up to date when dealing with long complex software updates.
Best-of-suite vendors move at their own pace. As best-of-suite vendors cover a lot of different uses, and are inherently large companies, they fall behind on trends. Having to implement these changes to their software can take a tremendous amount of time. They will release updates and changes when they want to, not when you need them. This can be frustrating for companies that are trying to keep up with the latest trends or needing to meet regulatory requirements.
You may find your software is lagging behind other systems that offer a more efficient and productive approach.
When buying from best-of-suite, you are investing in one single vendor. By default they will have significant control and influence over your company. Migrating to another vendor will slow your company down, data will be difficult to migrate to another system. This can cause a lot of headaches for your IT team, and you may feel trapped in an agreement and at the mercy of large price increases.
Now that we’ve broken down the best-of -suite, let’s focus on the meaning of the new trend to vendor selection: best-of-breed.
The best-of-breed approach simply means choosing the best applications and vendors possible for each specific function of your workplace. Rather than choosing from one vendor in best-of-suite, you are choosing from multiple.
This means you can pick specialised applications that meet your specific business requirements. These can be specific to:
Your industry might have compliance or safety requirements that are different from others. You might require applications with certain features or functionality that aren't always available in an all-in-one solution.
The needs of a small business are different from those of a large enterprise. A smaller company might not have the same budget for software as a larger one. They also might not need all the features that come with an enterprise solution.
Different users have different needs. For example, a designer will need different software than an employee that's focused on the operations of the business.
As Simon Thorpe, the senior director of competitive intelligence at Okta said, we’re living in a “zero-trust environment” and therefore, cyber-security should be the top priority of any successful business.
Both best-of-breed and best-of-suite vendors offer high levels of security for your data. However, in a best-of-breed system, your data is spread out over numerous vendors which some may see as more secure as it’s less likely that one vendor will be compromised.
In a best-of-suite system, all your data is in one place which some may see as less secure. However, the vendor will have high levels of security to protect your data.
Rather than choosing from one vendor, best-of-breed allows companies to choose the best solution for their needs. This results in improved productivity as you are aided by the best software possible.
Although some best-of-breed vendors do prioritise tool integrations, they can often be slightly limited and don’t enable certain features you might expect. If you’re interested in exploring this topic, we would be happy to have a chat with you. You can email the team here.
Best-of-breed applications are solutions created to fix one specific problem. They are often experts within a specific field and more likely to do a good job in their area than a generalist best-of-suite vendor.
Along with being specific, the functionality will often be improving all the time. Best-of-breed products have a higher frequency of software updates.
As best-of-breed applications are often out of the box solutions, you will spend far less time on the onboarding process. This will allow you and your teams to start repeating the rewards in no time. These vendors also tend to have more intuitive designs, making the product easier to use than traditional software.
By being able to use the software quicker and being able to navigate the software easier, you will get more work done quickly and therefore gain a faster return on investment.
A unique benefit of best-of-breed over best-of-suite is that you can invest in multiple software vendors rather than relying on only one. By diversifying through best-of-breed software choices, you gain more flexibility over your applications.
If one application falls below your expectations, or transforms into something else, you can easily change that specific application. This is in direct contrast to best-of-suite, as changing your only vendor will have a big impact on your company’s operations and success.
Despite the many benefits of best-of-breed software vendors, there are some drawbacks to pay attention to.
If you are a large enterprise, you may end up needing to choose and manage a lot of different vendors to fit all your needs. This can make things quite complex, especially when onboarding new members of staff and ensuring that all members of your team are on the same page.
Because you may be working with many different software vendors, troubleshooting can also become quite a complex process across teams.
Due to there being more vendors, fragmentation is always likely. This can lead to fragmented teams, fragmented apps and also fragmented information.
It may also be harder to find the relevant information between all these applications as data is not always fully integrated and automated across the different software vendors.
This may not seem as the most important factor, but some companies may want to download reports and data from their applications that all look the same in order to create a clean and consistent look.
Using different best-of-breed applications will make this harder to achieve as each software vendor will have their own specific templates and looks.
Best-of-breed vendors can often share the same type of use cases. For example, two separate best-of-breed vendors may have great video messaging platforms.
You might have ultimately spent money for two of the same product. Some may see this as an advantage as it allows you to try out different vendors and find the perfect fit for your needs. However, others see these overlaps can equate to extra money lost.
Now that we’ve taken you through what both of these styles of software vendors mean, the benefits and drawbacks of both, let’s consider what factors you need to consider when choosing which one to implement into your business.
The first thing you’re going to want to do is make a list of all the essential things that you need within your company.
Take a look at Okta's report that uncovers the best productivity applications. Which apps are the best for your business, do they come from one vendor or multiple?
Once you know what you need, then you can figure out whether there is an efficient best-of-suite vendor that suits all your needs or whether you may need to choose different best-of-breed vendors that meet your essential needs better.
The second factor to consider is how long you are able to spend on the onboarding process. As mentioned earlier, best-of-suite vendors tend to take longer to onboard as they have to integrate into a company-wide system rather than fit a specific need.
Best-of-breed apps are often much faster to onboard and start using. Some can be activated in a few clicks. Consider how much time you can give for this onboarding process.
The third factor is a longer term concern. You may want to consider how regular the system updates are across your vendors.
How often will you need updates? If you are in a fast moving market, perhaps you’ll need them quite regularly. If so, best-of-breed is best for you, as the software is often update more frequently.
Consider how much control you want. Do you mind one vendor having significant influence over your data and information, or would you rather that was spread out over numerous vendors? In a best-of-breed approach, when a spoke breaks or is removed, the wheel still functions. In a best-of-suite approach, when one spoke breaks the whole wheel collapses.
Looking internally, in a best-of-suite system, one internal team generally controls the system. They will be the ones responsible for updates and changes. In a best-of-breed system, each team has more control over their own apps as they are separate from each other.
Think about how much you want to budget.
Best-of-breed vendors often offer subscription plans which can make costs more manageable. Plans are generally per user so you only pay for what you need. In some cases, best-of-breed vendors may even offer free versions of their products. You can easily swap best-of-breed vendors in and out and customise your use to your budgeting needs.
Best-of-suite vendors are generally more expensive as you are paying for the entire system rather than just specific applications. These systems tend to be ‘all you can eat’ so you will be locked into their system whether you use all the features or not.
If you’ve gone through the previous factors and you’ve decided the best approach is best-of-breed, the rest of the article is for you. How can you really make it work within your company?
One of the best ways to make best-of-breed work across different vendors is to ensure all of your apps and information is easily accessible. A report from Wakefield Research, found that 54% of U.S. office professionals report wasting time searching for information across apps. McKinsey has reported that over 25% and decreasing time wasted searching for information.
Being able to easily share and access information across your applications is crucial in increasing productivity levels. But Best-of-breed vendors are typically disconnected.
You can use our platform to seamlessly integrate your everyday applications such as Slack and Trello. You can then search all your apps or discover real time updates via the Workplace Feed. This helps our users find information up to 3 times faster based on user feedback.
As a business, you must ensure that you are communicating clearly with your team, especially when making the change to best-of-breed software vendors.
You should ensure that everyone knows how their information is being used, shared and viewed by others within your company. You may also want to explain why you have chosen the best-of-breed applications and showcase how they can lead to a more efficient schedule for your workers. Lastly, communicating how each application is used is also important, and this can often be detailed in your company handbook.
Similar to integration, orchestration refers to the automated configuration, coordination, and management of best-of-breed solutions.
An example of orchestration is Single Sign On (SSO) technology. This allows users to securely authenticate multiple applications and websites using just one set of credentials. This combines multiple identities of your users/employees so that they can have smooth experiences logging into and transitioning between apps.
Automation and orchestration are critical in making best-of-breed work, as they help to increase efficiency and productivity levels.
Creating new software has never been easier, with this only accelerating in the future. The rise of cloud computing, open source and more recently AI, no-code and Web 3.0 will only bring more bespoke apps to the market.
The companies that are adopting the best-of-breed approach will be in the best position to make use of the best applications. It's our view that those adopting the best-of-suite approach will be left behind.
But, there's a problem. The more vendors organisations have, the more they will need to centralise and bring their applications together. Otherwise, they run the risk of becoming fragmented.
Prioritise integration, communication and app orchestration to successfully take advantage of the Best-of-breed approach. If you need to speak to an integration expert, then reach out to the team today.
Which approach do you use: best-of-breed or best-of suite? Which one does your company use and where do you see the industry moving in the future? Let us know by messaging us on our Twitter or LinkedIn.