The midmarket is wide open for software as a service offerings.

Enterprise vendors such as Oracle and SAP have failed to reach midmarket companies with the fading strategy of deploying broad -- and proprietary -- business suites as the market is too fragmented. 

Traditional IT and business process outsourcing companies, which have oriented their pricing, packaging, sales and support models to the large enterprise, are experiencing slow growth and declining profitability yet have not shown the capability to move down market.

Microsoft, which has a well developed technology strategy for small business markets, has struggled to move up the ladder.  Unable to afford customization across applications, mid-size companies, in what has proven to an expensive and less-than-optimal approach, have done what they can by bringing together functional applications via XML, APIs, and third party services.

As did the enterprise before it, the midmarket is beginning to focus on migrating from disparate, often standalone applications to suites of applications that share a common user interface.  Because the midmarket continues to mystify most vendors, there are significant opportunities for vendors and vendor/channel partnerships to deliver a platform of applications and services to mid-size companies.

The optimal platform is already defined as software as a service.  IDC reports that, in a survey of 512 IT professionals in North America, 79% had already purchased or were considering software as a service.  Research by Forrester further reveals that midmarket companies are leading that adoption.  The opportunity is to deliver a relevant suite of applications and technical and business enablement services through an on-demand revenue model on a trusted hosted platform.

Mid-sized companies want to work within standardized applications and processes.  The sheer size of the midmarket base -- approximately 275,000 companies worldwide according to widely accepted estimates -- and the dearth of trusted brands competently serving this segment, combined with the direct relevance of the SaaS technology and business model, have created considerable upside for those companies that can effectively execute an on demand strategy.

SaaS based application, services, and delivery partnerships are being created to serve horizontal and vertical industry segments.  There remains significant upside in bringing solutions together to target defined markets.  I'll address this and identify aspects of successful partnership strategies in another entry.

Traditional IT and business process outsourcing companies, which have oriented their pricing, packaging, sales and support models to the large enterprise, are experiencing slow growth and declining profitability yet have not shown the capability to move down market.

Microsoft, which has a well developed technology strategy for small business markets, has struggled to move up the ladder.  Unable to afford customization across applications, mid-size companies, in what has proven to an expensive and less-than-optimal approach, have done what they can by bringing together functional applications via XML, APIs, and third party services.

As did the enterprise before it, the midmarket is beginning to focus on migrating from disparate, often standalone applications to suites of applications that share a common user interface.  Because the midmarket continues to mystify most vendors, there are significant opportunities for vendors and vendor/channel partnerships to deliver a platform of applications and services to mid-size companies.

The optimal platform is already defined as software as a service.  IDC reports that, in a survey of 512 IT professionals in North America, 79% had already purchased or were considering software as a service.  Research by Forrester further reveals that midmarket companies are leading that adoption.  The opportunity is to deliver a relevant suite of applications and technical and business enablement services through an on-demand revenue model on a trusted hosted platform.

Mid-sized companies want to work within standardized applications and processes.  The sheer size of the midmarket base -- approximately 275,000 companies worldwide according to widely accepted estimates -- and the dearth of trusted brands competently serving this segment, combined with the direct relevance of the SaaS technology and business model, have created considerable upside for those companies that can effectively execute an on demand strategy.

SaaS based application, services, and delivery partnerships are being created to serve horizontal and vertical industry segments.  There remains significant upside in bringing solutions together to target defined markets.  I'll address this and identify aspects of successful partnership strategies in another entry.