Tech Execs At MES: IT Innovation Is Cooking At Midmarket Firms

Midsize companies are some of the most innovative, pragmatic and business-focused when it comes to leveraging IT resources, yet their needs are often neglected by technology vendors, according to a panel of IT executives who shared insights on the market Tuesday at the Midsize Enterprise Summit West.

Tightly constrained by budgets but with many of the same concerns as large enterprises, regional businesses face greater pressure to innovate and deploy cost-effective solutions in their data centers, agreed the representatives from Cisco, Axcient, SAS and Acumatica who addressed IT leaders attending the conference, hosted by The Channel Company, CRN's parent, in Los Angeles.

Midcap companies "have as sophisticated needs, if not more sophisticated, as those in the enterprise," said Sherri Liebo, vice president of global partner marketing at Cisco. But "the way we address those needs is different."

[Related: Veteran CIO To MES West Attendees: 'If You're A Pure IT Person, You're A Dinosaur']

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Jon Roskill, CEO of Acumatica, a cloud-based ERP developer, said for a decade vendors had delivered stale solutions to medium-sized businesses. That's changing fast.

"With the cloud platform transition, all this new innovation has opened up," Roskill said. Now vendors can help midsize businesses function like large enterprises -- at a much lower price.

Annette Green, vice president of sales in the Commercial Business Unit at SAS, a veteran advanced analytics developer, said the transformation isn't really about changing the core technology.

"It's more about taking that technology, repackaging it, repricing it and offering new deployment options that enable midmarket companies to take full advantage of it," Green said. "Analytics is one of the best ways for small companies to become larger companies."

Julie Gibbs, vice president of marketing at Axcient, a Disaster Recovery-as-a-Service vendor, said the cloud is accessible for businesses that lack the luxury of enterprise budgets in a way some on-premise resources are not.

And those companies, in many ways, need the benefits of the cloud when doing backup and recovery -- especially the ability to failover quickly -- more than their enterprise brethren.

"For the midmarket, an outage has a disproportionate effect on the business," Gibbs told the audience.

Liebo, of Cisco, said she finds midsize businesses, because their resources are more constrained, take a more business-oriented approach to deploying IT solutions. With those companies, it's less "about a religious discussion about technology" and more about tackling real business challenges.

"We learn a tremendous amount about what our products can do by listening to the innovation from the midmarket," she said. That's the market in which Cisco is seeing the most growth, and for which the networking giant is advancing its product portfolio first and fastest.

Liebo told the chief information officers and IT directors in attendance that "a great place to start" building a relationship with Cisco is around security. Communication and collaboration tools are a second point of entry she recommends.

"In the era of the digitization of companies, nonprofits, governments, you're going to need a network-based architecture where you can allow the decision making to come closer to where the action is," said the Cisco vice president.

Green said companies of the kind represented at MES are willing to engage customers, looking to move fast, and they're eager to disrupt so they can "challenge the gorillas in the market." The corporate politics that slow enterprise technology provisioning are not as prevalent, said the SAS vice president.

Despite the unique opportunities presented by those companies, Roskill said, many business software vendors are abandoning their midsize customers.

Competitors like NetSuite are trying to become "a mini Oracle or SAP," Roskill said, abandoning regional companies in the pursuit of deals north of $1 million. As they look to move up the food chain, those vendors are increasingly cutting their channels out of the sales equation, according to Acumatica's chief executive.

At the same time, many channel resellers are searching for the next solution they can bring to midsize customers, he said.

New technologies are also changing the range of channel companies midsize businesses can build fruitful relationships with. Partners are no longer as geographically confined as they once were, thanks to the cloud, Roskill said, and Acumatica is seeing many small shops starting to work with firms all across the country.

Because of that trend, a greater degree of specialization is emerging in the channel, he said.

That "microverticalization," Roskill said, "that's one of the most exciting things about where the channel is going these days."