CRM Definition: What does "Enterprise" mean?

Note: this is a part of our CRM Definitions Series.

If you’re researching CRM software, or really any type of business software, you’ve probably seen the word “Enterprise” thrown around a lot. Enterprise software, enterprise-grade security, or enterprise-level features are all examples of how the term might be used, but what does it actually mean?

The dictionary definition of “enterprise” is: a business or company. So on the surface, “enterprise software” just means software meant for businesses. I wish it were that simple, but it’s not. When software companies use the term “enterprise” there’s a hidden meaning.

The real meaning of “enterprise” is: a really really big business or company. Enterprise is the alternative to small business. Enterprise means that you have hundreds to thousands of employees, or at least that you’re behaving as if you do (lots of small companies like to act much bigger than they are).

So what should you expect from “enterprise” software?

As soon as the word “enterprise” is used in association with software, you should think of it as an industry buzzword that means you’re going to be treated like a huge company, whether you are one or not. Here’s how huge companies are treated when purchasing software:

• You’re required to talk to a sales person: Most enterprise software companies won’t let you sign up and try their software on your own. You have to go through their inside sales team if you want to see the software in action.
• Long sales cycles: Enterprise sales normally take months or years to complete. For this reason, the sales team at enterprise software companies aren’t incentivized to respond quickly to your inquiries, and it might take a while to get up and running.
• Pay annually rather than monthly: Huge companies have lots of money to spend, but there’s a lot of paperwork involved when spending it. For this reason, they prefer paying for a year or more upfront, and they don’t mind really high prices. Even if a software company lists monthly prices on their website, it’s likely that they bill you annually if they mainly target enterprise customers.
• Add-ons and upsells required: I don’t know why, but enterprises love consultants. They love having a team for training and a team for implementation and a team for maintenance, migration, and any other area related to software you can think of. Most enterprise software products exist in an ecosystem full of consultants and add-on services, so expect that to be par for the course.
• They only care about the big deals: If you’re a small business and you want to try an enterprise software product, they’ll probably let you, but they’re not going to pay much attention to you. These sales reps are paid on commission, and the commission from a 10-seat deal won’t put a dent in their overall numbers. They want to spend their time going after the big fish.

Is enterprise right for you?

If you work at a big company, most of those bullet points probably sound pretty good. Enterprise software sales are meant to embed themselves into the bureaucracy of your organization and slowly make progress until they’ve got the sale. So if you have 500+ employees and you’re looking for a CRM, project management, or some other type of business software, then you almost certainly want to go with a company that says “enterprise” every other word.

On the other hand, if you’re a small business, most of those things probably sound pretty terrible. You just want to test out a few products, receive training and help from knowledgeable customer service people, and pay a reasonable price. If that’s the case, you probably want to avoid the “enterprise” buzzword, and focus more on “small business” or “SMB” software.

I hope this clears up what “enterprise” means. If you have any questions, you can always reach me on Twitter (@TylerMKing)

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