Feeds

Let the battle for the mid-market commence

We're attractive and we know it

Security for virtualized datacentres

Enterprise software vendors have traditionally targeted large Global 3000/FTSE 250 companies with revenues of $1bn+. However, as the competitive pressures in corporates intensify and customers consolidate their suppliers, the "mid-market" is becoming an increasingly attractive target for vendors, especially as it fits well with the emerging SaaS (Software as a Service) business model.

The mid-market is loosely defined as those companies with revenues in the $50m - $500m range. These are typically manufacturing companies and subsidiaries of larger entities. Currently mid-market companies are best served by smaller vendors in performance management area such as Cartesis, Prophix, and Applix, who have all achieved excellent financial results for 2006. Similarly, LogiXML and QlikTech in the business intelligence market have thrived. Judging by their references and testimonials they are all doing a very good job of serving the mid-market.

Normally these companies compete with the channel partners from the likes of Business Objects and Cognos, and quite often win. Mid-market companies like their suppliers to take ownership and responsibility for the success and ongoing maintenance of their systems. Direct suppliers are in a stronger position to offer this than resellers.

Mid-market suppliers typically optimise their offer around the needs of mid-market companies. Such companies want a stronger packaged element that requires less customisation, consultancy, and systems integration. They want a good service from a single source. They want a c. $50,000 entry level total cost of ownership. They want the system to be relatively simple and not too onerous on the limited IT resources available. They want it up and running quickly, with an absolute minimum of disruption to business continuity.

Unfortunately for the mid-market specialists, these are also the benefits offered by SaaS, which will enable the larger suppliers to target the mid-market directly.

Business Objects has a big ambition to grow its mid-market revenues using its on-demand SaaS services both from crystalreports.com (for business reporting) and using its latest acquisition, Nsite, as a delivery mechanism for other online products. SAS has expressed an interest in the mid-market, as has Cognos. "SAP is (now) for great companies, not just great big companies" SAP's advertising proclaims. Oracle has just launched a version of its Daily Business Intelligence for small and mid-sized customers.

But the biggest fly in the mid-market specialists' ointment is likely to be Microsoft. Over two-thirds of the mid-market companies use Excel for their financial management. Microsoft's PerformancePoint builds off the Excel legacy to offer budgeting and planning, financial consolidation and more. "Office will be the face of Microsoft BI, a complete offering, and a new economic model," a Microsoft spokesman said. Low cost, compatible with existing office systems and SQL Servers, out-of-the-box, and has the possibility of being sold through 600,000 Microsoft channel partners worldwide. Scary stuff.

Of course, we have heard this all before in the ERP market five years ago. A few small specialist vendors like QAD remain, but the vast majority were acquired by venture capitalists or larger vendors long ago. Could the same happen to the mid-market specialists in the BI and CPM markets? Very likely given the continued acquisitive behaviour of the likes of Cognos, Business Objects, and Hyperion. We shall watch with interest.

Copyright © 2007, IT-Analysis.com

Providing a secure and efficient Helpdesk

More from The Register

next story
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
iOS 8 release: WebGL now runs everywhere. Hurrah for 3D graphics!
HTML 5's pretty neat ... when your browser supports it
Mathematica hits the Web
Wolfram embraces the cloud, promies private cloud cut of its number-cruncher
Mozilla shutters Labs, tells nobody it's been dead for five months
Staffer's blog reveals all as projects languish on GitHub
'People have forgotten just how late the first iPhone arrived ...'
Plus: 'Google's IDEALISM is an injudicious justification for inappropriate biz practices'
SUSE Linux owner Attachmate gobbled by Micro Focus for $2.3bn
Merger will lead to mainframe and COBOL powerhouse
iOS 8 Healthkit gets a bug SO Apple KILLS it. That's real healthcare!
Not fit for purpose on day of launch, says Cupertino
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.