Newsflash

Over the past several years, the world’s largest software companies have zeroed in on mid-market companies as a new “sweet spot,” a $140 billion market ripe for sales. But is selling business applications into mid-market companies the same process as selling enterprise software into Fortune 500 companies? What is it that defines these companies and what motivates them to buy business applications?

First, we need to describe this lucrative software market. For the purpose of this article, we will define mid-market companies as standalone companies or departments of large corporations with 100 to 1,000 employees. These companies face business complexities similar to that of a large company, and have an operational and transaction orientation.

Unlike large companies, which can rely on in-house IT departments or outside consultants to help with software purchases, mid-sized companies are characterized by a lack of in-house IT staff or infrastructure. For them, application complexity can be a big deterrent to buying. They do not have time for a costly installation process and complex training. Instead, mid-market companies are looking for software applications that are simple to install and that work straight “out of the box.”

Dumbing down a generic financial, manufacturing or human resources package for an organization with fewer users might seem like it would do the trick. But nothing could be further from the truth!

The business people who use mid-market applications value applications with domain-specific support for their industry. They want rich functionality that provides a competitive edge in their marketplaces. In short, they are looking for software applications that fit their business needs “like a glove.”
 
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Written by Web master   
Thursday, 13 May 2004

New IDC Survey Finds SMBs Less Interested in ''Software as a Service'' in General Than in Individual Service Offerings That Address Specific Problems

Software as a service (SaaS) has strong growth potential, with 5.1% of PC-owning small firms and 15.2% of PC-owning medium-sized firms planning to move forward with a SaaS solution within the next 12 months, a new IDC study reveals. But interest in specific solutions, rather than the appeal of SaaS in general, will be driving SMB adoption.

"SaaS is intuitively appealing as a method of software delivery to small and medium-sized businesses (SMBs), but they have not been adopting SaaS as quickly as originally anticipated, even though the reality of their move to SaaS is greater than their perception," said Merle Sandler, senior research analyst for IDC's SMB Markets program. "Providers of on-demand software face a number of challenges when targeting SMBs, including establishing appropriate sales channels and deciding how best to market to these firms."

Other key findings from the IDC survey include:

  • The ability to pay for capabilities as needed is the main factor encouraging small businesses (SBs) to use SaaS. Adding new users without difficulty and easing the workload of IT staff are factors nearly as important for medium-sized businesses (MBs).
  • Concern about data security is the factor most frequently cited as discouraging the use of SaaS among firms of most sizes.
  • SBs are most interested in adding CRM and software to handle remote access from other locations, while MBs are most likely to move to the online delivery of payroll and HR applications.

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