Feature

Analysis: Channel to play a vital role in battle for mid-market

If you are looking for a theme for the year aside from the long-awaited recovery, there is one area of the market that holds great promise.

The mid-market is going to be courted by vendors and the channel with a vigour that reminds many of us of the moment when the SME market became ultra-fashionable.

The small business market continues to remain the engine room of the British economy, both on paper and in terms of money actually spent. But now, it seems, it is time to take the M out of SME and concentrate on that space in its own right.

Just a few weeks into the year and there are clear signs from some large players that the mid-market is going to be a big battleground this year. Manufacturers are spending serious money and making internal changes to ensure they are in a position to get things going.

Co-marketing plans

First to step up this year with talk of the mid-market as a target was IBM. It also voiced its commitment to spend money on improving marketing and support for the channel.

IBM is stumping up $130m (£80m) to fund its co-marketing efforts, making it clear that it is leaving the vast majority of the mid-market as a channel play and has made no bones about the importance of doing all of this before some of its competitors.

"It is the next stage of evolution of our approach to working with mid-sized companies with 1,000 users or below," says Jacqui Davey, vice-president, business partners, IBM UK & Ireland.

The key to the IBM approach is to come up with solution offerings that resellers can sell to mid-sized customers, the first being around data protection.
 
IBM has not only stumped up millions to support the ambitions in the mid-market, but it has made internal changes to establish the solutions development team which will be producing more offerings for resellers to take out to customers over the course of this year.

"The mid-market is one of the largest market segments in the UK. It is still growing and there is still opportunity, and the whole IT industry recognises this," says Davey.

Collaborative talk

There is a real sense that the starting gun has been fired on the race to capture the mid-market, which adds to the urgency with the announcements being made this early in the year.

When Paul Walker, chief executive at Sage, stood up on a Parisian stage to launch its ERP X3 product last week, he also talked of a restructure aimed at changing its standing in the mid-market.

"The mid-market is strategically important to us. There has certainly been scope for improvement, increasing international collaboration and support between our businesses," he said.

The vendor is establishing an international group to talk across its various global businesses "in one voice to the mid-market" and to give a unified message to customers.

Channel's crucial role

Sage might be coming to the mid-market from the small business space, but there will be others that try to come down from an enterprise position.

What nearly all of the efforts in the months to come will have in common is the reliance on the channel to provide the services that are required to prise open more business in the mid-market space.

Both IBM and Sage have recognised the crucial role that the channel has to play.
Walker talks of the preference customers have for local support, with its resellers being in the front line of selling ERP X3 and increasing its mid-market activity from the 13% of its activities presently.

Davey says resellers' understanding of the mid-market will be crucial to the delivery of the ambitions of those seeking to grow in the sector.

Training and marketing efforts will also be important in raising awareness among mid-market customers that an array of products and services specifically designed with them in mind will be heading their way in 2010.


The mid-market

Although there are likely to be as many definitions of the mid-market as there are days in the week as different vendors come out with their own strategies this year, the early classification has been laid out by IBM.

In the eyes of Big Blue, the mid-market is 1,000 users or below, a concept that seems simple. How long it will remain so straightforward once others wade in with their own definitions is debatable.




This was first published in January 2010

Join the conversation Comment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.