As is especially the case when developing software, the data that you maintain under version control is often closely related to, or perhaps dependent upon, someone else's data. Generally, the needs of your project will dictate that you stay as up to date as possible with the data provided by that external entity without sacrificing the stability of your own project. This scenario plays itself out all the time—anywhere that the information generated by one group of people has a direct effect on that which is generated by another group.
For example, software developers might be working on an application that makes use of a third-party library. Subversion has just such a relationship with the Apache Portable Runtime library (see the section called “The Apache Portable Runtime Library”). The Subversion source code depends on the APR library for all its portability needs. In earlier stages of Subversion's development, the project closely tracked APR's changing API, always sticking to the “bleeding edge” of the library's code churn. Now that both APR and Subversion have matured, Subversion attempts to synchronize with APR's library API only at well-tested, stable release points.
Now, if your project depends on someone else's information, there are several ways that you could attempt to synchronize that information with your own. Most painfully, you could issue oral or written instructions to all the contributors of your project, telling them to make sure that they have the specific versions of that third-party information that your project needs. If the third-party information is maintained in a Subversion repository, you could also use Subversion's externals definitions to effectively “pin down” specific versions of that information to some location in your own working copy directory (see the section called “Externals Definitions”).
But sometimes you want to maintain custom modifications to third-party code in your own version control system. Returning to the software development example, programmers might need to make modifications to that third-party library for their own purposes. These modifications might include new functionality or bug fixes, maintained internally only until they become part of an official release of the third-party library. Or the changes might never be relayed back to the library maintainers, existing solely as custom tweaks to make the library further suit the needs of the software developers.
Now you face an interesting situation. Your project could house its custom modifications to the third-party data in some disjointed fashion, such as using patch files or full-fledged alternate versions of files and directories. But these quickly become maintenance headaches, requiring some mechanism by which to apply your custom changes to the third-party code and necessitating regeneration of those changes with each successive version of the third-party code that you track.
The solution to this problem is to use vendor branches. A vendor branch is a directory tree in your own version control system that contains information provided by a third-party entity, or vendor. Each version of the vendor's data that you decide to absorb into your project is called a vendor drop.
Vendor branches provide two benefits. First, by storing the currently supported vendor drop in your own version control system, the members of your project never need to question whether they have the right version of the vendor's data. They simply receive that correct version as part of their regular working copy updates. Secondly, because the data lives in your own Subversion repository, you can store your custom changes to it in-place—you have no more need of an automated (or worse, manual) method for swapping in your customizations.