Wednesday, May 26, 2004

Mid-Market Mania

China Sourcing Alert    
Wednesday, May 26, 2004
Dateline: Qingdao, Shandong, China
Mid-Market Mania
EVERYONE is talking up the mid-market these days.  Even I can't resist:  One of my slides for next week's APEC presentation is on the mid-market opportunity for SIs based in China.  Matter of fact, two subject areas dominate the clippings I save for this blog:  Web services and the mid-market.  (Hmmm ... how about Web services for the mid-market?)  In the mid-market space, Forrester seems to be taking a lead among the top four IT advisory services, although IDC is doing a pretty good job, too.  We can expect to hear a lot more from the Stamford and Boston analysts in the months and years ahead.
But what is really important is not what the analysts say, but what is happening in the market.  In no particular order, let's see what is happening.  (Actually, I'm presenting this in the order that they're stored on my smartphone using HandStory!)
In the "Memo" section of HandStory (which I must have clipped from a source retrieved via AvantGo), I have an article about SAP, courtesy of AMR (see and ).  Evidently, SAP is not only expanding its mid-market presence, but using a verticals spin as well.  This is the best approach.  Kudos to SAP!!
The next item also goes in the "SMEs meet verticals" category.  It's BEA attempting a spin on IBM's strategy (see ), using VARs and SIs for chasing customers in verticals.  Frankly, the IBM offerings seem a lot more comprehensive.
Regarding market size, Forrester states that SMEs are the place to be in 2004, planning to increase their IT spending by 6.6% Y-O-Y, compared to 1.7% among "larger companies."  Spending will focus on hardware, security and information management software.  (Hey Forrester gang, what in the world is "information management software"?  Sounds kind of nebulous.)  They also claim that wireless networking is hot, as are new PC rollouts.  They make a goofy causal claim stating that there is high intention to buy content management and BI software.  Sorry Forrester, but the two are NOT related.  Content management and knowledge management software, yes; content management and BI software, no.  But I get the point -- and concur.  The final takeaway is that Microsoft dominates mindshare for systems management (is this what Forrester means by "information management"?), content management and BI software.  Definitely worth reading!  See .
Bottom line:  The mid-market is hot and a verticals approach using SIs and VARs is the best approach in reaching SMEs.  For SIs in China, team up with the 200-1,000 largest SIs in the States to take on sub-contracting work in specific verticals (and, most importantly) with specific platforms.  (More on this in a forthcoming China Sourcing Monitor feature.)
BTW, I've chosen to use "mid-market" versus "midmarket."  Why?  Because I did a test using my Google News bookmarklet and the results were overwhelmingly in favor of "mid-market."  A little tip if you're wondering whether to use a hypen or not.
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc. (blog) & (access to blog content in China) (AvantGo channel)
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