Globally the annual mid-market (companies with fewer than 1000 staff) spend for IT hardware, software and services exceeds $250B acording to Andy Monshaw, IBM’s General Manager for Mid-Market. Andy lives and breathes mid-market, he personally leads as many as 15 end user and IBM partner round tables a month, spending his time listening to customer problems and getting intimately familiar with the output of IBM’s comprehensive smart analytics reports and dashboards.
Mid-market is a highly valuable segment that is served almost exclusively by the channel, predominately Independent Software Vendors (ISV), Managed Service Providers (MSP), Systems Integrators (SI) and the other independent partners of the major players (IBM, Dell, HP, SAP, Microsoft etc..). The majors support this route to market because of the costs and complexities of engaging smaller businesses with limited IT capabilities and modest annual budgets in line with their size. Interestingly this is a market that Oracle does not figure strongly in at all!
Andy also claims that 20% of the total addressable market (TAM) from this segment is driven by direct hardware and software sales, so only one fifth of expenditure is do-it-yourself supported by in-house IT staff, leaving a massive $200B of revenues coming from solutions, consisting of integrated hardware, software and services. Competition for this solutions market is tough with tens of thousands of integrators in play and no single vendor owning even 1% of the market. IBM research shows that mid-market end customers make product and integrator selection by leveraging the Internet with 85% of new business coming from search and social media.