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Dave Manzer

Great article, Julie. I like the idea of segmenting SMB by revenue rather than HC. As a former sales and marketing professional for business software VARs, I rarely looked at HC. For me, it was always about the revenue. There are always some companies out there whose HC may be low but revenue high and level of operational sophistication equally high. I would argue that you should reduce the threshold of the "Lower mid-tier" to $100k as some businesses are extremely tight-fisted and remarkable unvisionary when it comes to running their operations. And that $100k includes deployment costs, to boot! Keep up the great analysis!!

Julie Hunt

Hi Dave, Great comment esp. with your experience and POV re: software sales and the VAR world. You hit the nail on the head as to why revenue reveals far more about potential prospects, with so much software providing productivity for doing more with fewer employees (HC), and as you say, there are many businesses that have sophisticated technology needs that don't necessarily employ a lot of people. But I like to include HC with revenue segments to add a dimension of perspective.

Max Gano

Really enjoyed your article. We are launching a new SaaS service supposedly directed at mid-market organizations but we keep gravitating to what I believe are large and F1000 types of characterizations of the market. We all either come from such organizations or have spent the majority of our time serving them. Our instincts are simply not yet tuned into the mid-market signals.

I am sharing this post with my team to re-emphasize the need to differentiate both in terms of the widely varying sets of needs and the lessened layers of decision making, etc.

I read your position as mid-size companies tending to be much more pragmatic and focused in their selections, looking for quick return through directly addressing specific needs. But they are also willing to consider more efficient, cost effective alternatives to the traditional rack-and-run on-site installation of licensed software.

Time for us to revisit our assumptions and make sure we are dialed in correctly. Many thanks for the concise guidance you have provided.

Brett Jackson

Good information Julie. I prefer looking at the SMB using both revenue and headcount but your addition of potential overall technology spend is a useful third dimension. Thanks.

Julie Hunt

Hi Brett,
Thanks for taking time to read the article and for adding your thoughts. Especially when targeting smaller companies, it's really important to know the max amount that companies plan to spend on tech, to understand if a software offering is priced right for a particular segment.

Scott Johnson

Hi Julie,
My name is Scott Johnson, and I am the CEO of CopperEgg. http://copperegg.com Our mission is to unify cloud monitoring, server monitoring, application monitoring, IT analytics and automation.
Your article is excellent.
Your analysis helped provide context for me as I am thinking through how to communicate to our target audiences ... those companies interested in deploying SaaS in the public cloud. It is a mind-bending conglomerate (or shall I be chic and call it a 'mashup') of markets / technologies / and economics.
Thank you for your well thought-out article.

Julie Hunt

Hi Scott,
Thanks for stopping by & sharing your thoughts. And thanks for the kind words & feedback - it's always great to know when my analysis / articles help people with their work.
Best wishes for success with CopperEgg!


Hi Julie,
I think that more articles/blogs like this are desperately needed! When I saw the date that this was written, my first thought was - and most software providers still don't get it! Some of the companies I have worked with are between $3M and $5M in revenue and finding BI solutions that understand their business is difficult. Mostly, they are just treated the same as a department within an enterprise. Unfortunately, in these cases, these companies have more diverse data and business needs than a single departmental solution within a large enterprise.
Thanks, as always, for your amazing insights into a market that is still underserved by software vendors.

Julie Hunt

Hi Lyndsay - thanks for bringing your important insights to the conversation. I agree that a lot of software vendors still don't get how to build solutions for mid-market companies; this point becomes even more significant when I note that I began analyzing, building and using this approach for targeting small & mid-market companies - in 2005 - for my market intelligence recommendations to vendor clients.
Excellent commentary on the lack of right-fit BI solutions for smaller companies - thanks for adding your expertise here!

Julie Hunt

For further points, please take a look at this post from Lyndsay Wise @wiseanalytics >> "Do BI solution providers really help SMBs w/ expansion towards mid-market?" http://bit.ly/xgmSYP Lyndsay consults with SMB buyers of BI software solutions, so she has a great background for assessing right-fit BI solutions for smaller businesses.

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