How do you get an enterprise software executive's ear? The fastest way is to say you've got a secret plan to sell to the mid-market manufacturer. You'll be the most popular person in the industry. Throw in the fact that you also know how to actually make money at the game, and now you're in about a slice of heaven most executives only dream of. Once again, everyone is gunning for the mid-market.
Truth be told, everyone is trying to do something about the mid-market these days-it's just that results are hard to find. Among top-tier vendors, SAP has new vertical mid-market solutions, Oracle is now pushing a mid-market Special Edition version it pioneered overseas, and PeopleSoft, when it's not digging a new trench in the on-going war with Oracle, is pushing yet another mid-market initiative. Then there's SSA Global, awaiting an IPO, with 16,000 mostly mid-market customers and some serious credentials, though today they're more of a maintenance revenue player than a new license player. QAD is still there, relying largely on stealth marketing to keep its name recognition above water. And IFS is also still playing for keeps, trying to rise above an increasingly noisy mid-market.
Then there's Microsoft, the uncrowned king of the mid-market, trying hard to ensure that its Navision, Great Plains and Axapta products start bringing in enough revenue to justify the red ink and the black eyes they've received over the past two years.
While everyone is working hard at defining new products and new strategies, no one, not even Microsoft, can claim true market leadership. Yet. Microsoft's customer base is enormous, and its reseller base second to none. But Microsoft has been "humbled" by this most unforgiving of markets, and so have most of its biggest rivals-everyone in the market is continually revisiting and revising its strategies in silent admission that nothing has worked well-enough so far.
Why all the fuss? Getting a good fix on the number of mid-market manufacturers is hard-just defining the term is difficult enough. One rough metric: there are more than 4.7 million businesses in the U.S. with less than 500 employees, and only 17,000 with more than 500 employees. Meanwhile, the top enterprise software companies combined have approximately 50,000 customers, with a lot of overlap. The prospect of tapping into a market measured in the millions, or hundreds of thousands, sounds too good to be true.
And so far it has been. Most of the strategies in place today have involved building a reseller/ partner channel that can deliver pre-configured functionality in a quasi-turnkey fashion. It's a basic requirement; necessary, but hardly sufficient to win the number one spot. The channel has been a major point of weakness, mostly because the role of reseller is fraught with problems. These companies take all the responsibility for success without having any real control over their technological destiny. They have to weather a highly cyclical market with much lower margins than the software suppliers. And, they have to succeed in a messy channel where the competition walking in the door is often a partner of the same vendor.
So bear in mind that the companies beating a path to your door are trying to fulfill a dream, and are having a heck of a time doing so. Your big problem, once you stop feeling sorry for them, is to sort through the choices. This is your chance to make a software exec's dream come true.