Software Economic Comeback Dependent Upon Middle Market Enterprises, According to New Aberdeen Group Report
Business Editors/High-Tech Writers
BOSTON–(BUSINESS WIRE)–May 7, 2003
Report Indicates Software Vendors Must Meet Special Criteria in Selling to Middle Market
The middle market enterprise sector (MME), defined as companies with annual revenue between $50 million and $1 billion, will account for up to $50 billion in total technology purchased by mid-decade, according to a recent report by Aberdeen Group, a leading market analysis and positioning services firm.
According to the report, the MME purchasing behavior is better predicated on revenue than on the number of people required to produce that revenue. Thus, business decisions regarding enterprise applications other than human capital management, payroll, or others that are per seat or per capita software purchases, can most easily be predicted by annual revenue than by headcount. In the public sector, however, agencies with smaller revenue ranges share more in common with the MME than with the smaller markets below the revenue range of $50 million.
“The ability to eliminate waste, redundancy, and lack of productivity through intelligent software choices in this vast market sector may well prove key to the turnaround in the global economy,” says Katherine Jones, research director at Aberdeen Group and author of the report, The Small and Middle Market Enterprise: Addressing Today’s Business Issues Through Technology. “Many middle market enterprises have had their existing business applications for several years, and will be looking for new applications during 2003-2005. While these companies take such software purchasing decisions very seriously, they often lack the sophistication of a large corporation in wisely selecting vendors or products that are the best fit with their corporation.”
The report looks at companies who provide software to the middle market as well as information from the customer base those companies address. Among the findings of the report are:
— Quantifying “middle market” by employee size is only useful to
vendors who sell solutions such as outsourced payroll by the
head, patients managed, or other per capita-based
applications. For many solutions, employee headcount fails to
capture the potential complexity – or the simplicity, in some
cases – of the company’s business.
— The vertical industry of the mid-market company more than
either revenue or employee count is a better indicator of
product fit and section criteria.
— Issues of integration plague the middle market IT users,
leading to repetitive re-entry of data, and the ensuing loss
of productivity and chance for error.
— Middle market companies often do not recognize when they have
outgrown their financial applications, an issue that can lead
to data loss and accounting errors.
— The lack of data migration between products as companies
migrate to more robust products is an ongoing issue; there is
no systematic growth path in the offerings of many of the
suppliers to this market, causing the company to virtually
start over with a new software package when the initial
application has been outgrown.
Profiled suppliers in the report include ACCPAC, ADP, Agresso, Best Software, Ceridian, iCode, Lawson Software, Microsoft Business Solutions, Netledger, Peoplesoft, SAP AG, Siebel Systems, SSA GT, and Ultimate.
In addition to the report, a Buyer’s Guide for Middle-Market Enterprises: Criteria for Vendor Section can be obtained separately. For a copy of the report or the Buyer’s Guide, please visit www.aberdeen.com or visit to the following link: http://www.aberdeen.com/ab_company/hottopics/midmarket/default.htm
An IT market research leader since 1988, Aberdeen Group continues to distinguish itself in a rapidly changing industry. Its forward-thinking research initiatives and positioning services are designed to address specific needs of multiple enterprise technology buyers and supplier organizations.
Aberdeen’s vigorous primary research program is based on surveys of targeted IT buyers in more than 25 market segments, providing real-time insights into buying patterns, growth rates and trends. In exchange for participation, a vast array of research is made available online – at no cost – to end users, a process that has proven particularly valuable to small and medium-sized businesses.
Aberdeen also works with a wide range of supplier organizations – from start-ups to established global corporations – to successfully bring products to market and effectively target marketing and sales efforts. Through Aberdeen’s online Access sites, which are focused on specific end-user communities, suppliers can access qualified survey research that helps them identify opportunities and better understand the needs of customers. Aberdeen’s Web traffic is among the highest – and fastest growing – of any major IT research firm.
Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California, and Fort Collins, Colorado. Aberdeen is accessible on the Web at www.aberdeen.com.
COPYRIGHT 2003 Business Wire
COPYRIGHT 2003 Gale Group