Midmarket Muscle

In large enterprise application deployment, there is usually a small army of IT people and consultants around to help smooth out the bumps. In the small-business segment, companies tend to rely on software applications that cost several hundred dollars, so the company payroll is not at stake.

Not so in the midmarket. In this segment, companies spend hundreds of thousands of dollars on applications and systems with a moderate amount of IT staff. Instead, they rely on third-party solution providers they trust to find applications that are easy to install, use and, most importantly, maintain. And woe to the solution provider that fails to deliver on any aspect of those requirements, because the patience of midmarket customers is notoriously thin.

That's why the stars of the midmarket are not traditional enterprise vendors such as SAP, PeopleSoft or Siebel. Nor is Microsoft,with perhaps the exception of Microsoft's Great Plains business unit,considered a trusted midmarket partner, given the lack of reliability and complexity of many of its tools.

The real stars of the midmarket are companies such as J.D. Edwards, Progress Software, Portal Software and Best Software. None of these companies has predicated its business model on extensive services revenue generated by custom-installing incomplete applications that need to be finished on-site. Instead, these applications tend to be more complete and have more flexibility, which means they don't require a company to bend as much to meet the business processes defined in the software.

But all things and markets change. Microsoft, following its acquisition of Great Plains, is attempting to come upstream with a new generation of midmarket applications. IBM has come out with WebSphere Express editions of its software that it promises will be easier to install. And SAP is mounting a concerted effort behind Business One, a suite of ERP applications designed specifically for midmarket companies.

The good news is that the opportunities in the midmarket are almost endless for those judged worthy. But the faint of heart need not apply.

Are you listening? Do you agree? I can be reached at (516) 562-7477 or via e-mail at [email protected].