Feeds

Let the battle for the mid-market commence

We're attractive and we know it

Top 5 reasons to deploy VMware with Tegile

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

Secure remote control for conventional and virtual desktops

More from The Register

next story
Microsoft to bake Skype into IE, without plugins
Redmond thinks the Object Real-Time Communications API for WebRTC is ready to roll
Microsoft promises Windows 10 will mean two-factor auth for all
Sneak peek at security features Redmond's baking into new OS
Mozilla: Spidermonkey ATE Apple's JavaScriptCore, THRASHED Google V8
Moz man claims the win on rivals' own benchmarks
FTDI yanks chip-bricking driver from Windows Update, vows to fight on
Next driver to battle fake chips with 'non-invasive' methods
DEATH by PowerPoint: Microsoft warns of 0-day attack hidden in slides
Might put out patch in update, might chuck it out sooner
Ubuntu 14.10 tries pulling a Steve Ballmer on cloudy offerings
Oi, Windows, centOS and openSUSE – behave, we're all friends here
Apple's OS X Yosemite slurps UNSAVED docs into iCloud
Docs, email contacts... shhhlooop, up it goes
Was ist das? Eine neue Suse Linux Enterprise? Ausgezeichnet!
Version 12 first major-number Suse release since 2009
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
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.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.