Dell executive Bob Skelley surveyed a room with more than 200 midmarket CIOs engaging with one another and a variety of IT vendors and was impressed. He realized a gathering like this is a rare event. The CIOs were attending this week's Midsize Enterprise Summit in Boca Raton, Fla., which is the world's largest gathering of such IT executives. Skelley, like many of his peers at leading tech vendors, believes the midmarket is one of the best growth opportunities in the industry today but it is not the easiest to master.
There are many ways to measure this customer segment but most analysts and vendors agree midsize enterprises employ between 100 and 1,000 employees and produce annual sales of $100 million to around $1 billion. Some are independent companies while others are branches or divisions or larger organizations with IT autonomy.
These CIOs gather once or twice a year to compare notes with one another and scout out new technologies or vendor partners. Having worked closely with these individuals for the past two years, I have uncovered some interesting trends, observations and myths which you need to understand before you befriend a fellow CIO or try selling or partnering with one. What follows are just a few important observations.
1: The community connection. The single most important characteristic of midsized CIOs is that their community or network is extremely important to them. In other words, they are not early adopters because they cannot afford to be, unlike their large enterprise counterparts. They are dependent on case studies and references when it comes to making a decision on, say, a server virtualization solution or investment in business intelligence software. Make no mistake about the fact that theirs is a brotherhood and sisterhood that runs deep. CIOs of midsized firms won't sign off on a tech decision unless one of their trusted peers either purchased a similar solution or offers an endorsement.
2: The sales cycle. CIOs who manage IT budgets for midsize companies say the sales cycle for closing deals with them is long, so be patient. It could take several months to more than a year to close a deal with these CIOs. There are many reasons for this but you have to understand that for the better part of this year, midmarket CIOs are looking for the technologies, applications and services they will deploy in 2011 and 2012. With average IT budgets of around $1 million, they have some dollars for discretionary IT projects but very little. These CIOs admit that many vendors and SIs get frustrated by the long sales cycle but it is just a fact of life of how they operate.
3: Relationship, relationship, relationship. These CIOs are manically focused on having true partnerships with their tech suppliers, be they vendor or VAR. That is perhaps the reason for the long sales cycle. For instance, at the Midsize Enterprise Summit (owned and operated by Everything Channel) they advise vendors to make a long-term commitment to the event because they want to see that these vendors are serious about the midmarket and investing deeply in it. Their influence has shaped how companies such as HP and TriGeo work with these CIOs. MES advisory board member Ed Eskew of Bernard Chaus is fond of saying that he wants partners "who have my back."
4: These CIOs are business leaders. The majority of CIOs in the midmarket are not just geeks -- they are savvy business executives focused on how technology benefits their organizations. They are working closely with the business leaders inside their organization and are held accountable for growing sales, or improving customer satisfaction or enhancing product innovation. Many vendors or SIs approach these CIOs as technologists and that can be a deadly mistake. Think of these CIOs as integral members of the business leadership team inside their organizations.
This is just Part I of the lessons learned from this week's MES East conference. In my next blog I will share some additional observations about these CIOs when it comes to want they want from vendor partners and their VAR partners.
Let me know what you think at Robert.email@example.com.