Every enterprise technology stack needs neutral vendors that play well with others, integrates seamlessly and keeps customer value front and center while refraining from the dreaded cross-sell.
The problem is that these neutral vendors are acquired if they become too successful. Once these neutral vendors are acquired it's all about the cross-sell game under new ownership.
We had a near miss recently with Informatica. Informatica has a data management platform that connects with all the primary clouds and enterprise systems. As businesses look to adopt generative AI, they're increasingly realizing that a vendor like Informatica is a go-to player.
Informatica was doing well being Switzerland that Salesforce reportedly wanted to buy it. Talks broke down and Informatica remains a neutral party--for now.
There are a bevy of neutral vendors considering regulators around the world are a hard sell on mergers and acquisitions. At some point that'll change. There are already signs that the M&A market will accelerate.
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It's possible that HashiCorp looked like a neutral vendor across clouds, but it has now been acquired by IBM in a $6.5 billion deal. IBM is an example of a company that has played the neutrality game and scaled. IBM has morphed repeatedly over the years, but the combination of AI and consulting are strong. Keep in mind that IBM also acquired Red Hat, which has kept most of its neutrality cred.
When conditions change vendor neutrality will become a bit of a pipe dream. Consider VMware. VMware was neutral across data center infrastructure and connected clouds. Now that VMware is part of Broadcom, customers are antsy about lock-in and the transition to subscriptions over licenses. Nutanix gets the neutrality sales pitch--until it's acquired.
I'd argue ServiceNow is a version of a neutral play as it can build workflows and processes on top of multiple systems of records. However, ServiceNow dependence also means higher prices at some point, but hopefully there's value too. "We're not interested in shutting anybody out. We're actually technology capable enough to open up to everybody and that's really turning on the whole ecosystem in our favor," said ServiceNow CEO Bill McDermott, speaking on the company's first quarter earnings call.
When it comes to large language models (LLMs), AWS obviously wants to be your Switzerland of generative AI. Google Cloud will also play that game. Microsoft will speak to it, but for now is closely affiliated with OpenAI. Hugging Face is your neutrality play but could be acquired down the line.
Celonis is another company that's neutral and can tap into multiple systems for process intelligence. It might grow into an IPO--or become part of a larger vendor. UiPath is in a similar automation and process bucket. There are plenty of other neutrality options including Atlassian, Nvidia and data platforms such as Snowflake, MongoDB and DataBricks.
Bottom line: Chances are that your neutral vendor today will not remain that way 5 years from now. CIOs can manage the vendor neutrality dream if they play along early and then keep their options open. The biggest lesson from the Informatica cadence is that neutrality can be successful, but eventually it's a pipe dream.
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