If you think the word “mid-market” might apply to your company, read on, as we explore the elusive meaning of this widely used (and perhaps misused) term.
As a mid-market marketing guy at Avaya, a major technology company, I’ve found that the definition of mid-market–or even midsize business for that matter–seems to depend on who you talk to and where in the world you live.
So why should you care? We believe there are several real attributes that are common to mid-market companies. If your technology provider knows how these affect your business, they are likely to recommend solutions that will really meet your needs.
The $10 million+ club
Let’s look at what those who follow the industry space have to say about the mid-market.
- Varied Definitions: The term “mid-market” varies by region, with the U.S. focusing on revenue ($10MM-$1B) and Europe often emphasizing employee count (250-2,500).
- Economic Impact: Mid-market companies play a crucial role in the economy, employing millions and contributing significantly to private sector GDP.
- Strategic Technology Use: Unlike smaller businesses, mid-market companies employ technology strategically, mirroring the practices of larger enterprises but on a tighter budget.
- IT Resource Constraints: These companies usually have IT departments but face challenges due to limited staff, requiring solutions that are both powerful and manageable.
- Customized Solutions Needed: Technology providers must understand the unique needs of mid-market companies to offer solutions that meet their enterprise aspirations without overwhelming their resources.
The term “mid-market” encompasses a range of companies that, while not easily boxed into a simple definition, share certain attributes that set them apart from small and large enterprises.
This segment is often characterized by annual revenues between $10 million and $1 billion in the U.S., according to the National Center for the Middle Market. However, the definition can vary significantly around the world, with European metrics sometimes focusing on employee numbers ranging from 250 to 2,500.
What truly distinguishes mid-market companies isn’t just their size but their strategic approach to technology adoption, their distributed multi-office structures, and their typically lean IT departments that manage broad responsibilities on limited budgets.
In the U.S., the National Center for the Middle Market – a collaboration between Ohio State University and GE Capital – produces a quarterly performance update and economic outlook for companies with annual revenues between $10MM and $1B.
They say that the 197,000 or so businesses that fit this description employ 43 million people and represent one-third of private sector GDP. So, if you fit their description, congratulations! Your company matters to the world economy.
Our next step is to consult the industry analysts, who note that the term ‘SMB’ has an accepted definition.
In Europe, the term SME has been formally defined by the European Union to guide investments, lending, government programs and the like. But when we ask about mid-market, we find varying descriptions – between 250 and 1,000 employees, less than 2,500 employees, and so on. And even if they did agree, what does company size say about how your requirements differ from those of a large enterprise?
One of the analysts we spoke to last fall referred to the mid-market as a “tweener” market–that is, a company-size segment that sits between, on the one end, the SMB, or small to medium-size business market, and the enterprise market.
Just when it seemed like his definition was just like everyone else’s, he continued, saying it was best to think of the market not by company size, but by companies’ technology adoption and support characteristics. Maybe we’re on to something useful…
The analyst then stated that mid-market companies think about technology strategically, much like a large enterprise, and that they have a distributed multi-office profile, much like a large enterprise. Unlike most SMBs, mid-market companies have an IT department, albeit one that is deficient in staff in some areas.
Big staff, small budget
So: Enterprise aspirations, limited IT resources. As I thought about IT resources, I landed on this post in the Spiceworks community
“I am the sole IT Admin for a medium-sized construction contracting business. However, I handle everything from networking, security, help desk, application support, server administration dealing with virtual and non-virtual boxes, managing exchange servers, Website and FTP development, print services, pretty much anything you can think of. I am having trouble putting a label on myself.”
The post generated a flurry of responses. Among several commonly accepted titles, many suggested that rather than calling himself an IT Admin, the writer should refer to himself as a “magician,” “the Doctor,” or “the Maestro.”
Another comment put the entire thread in perspective by saying, “I think most IT people in an environment of 1,000 or so users are probably in your shoes. If it has a plug and people don’t understand it, somehow you are in charge of it.”
For a technology company like Avaya, these perspectives have to inform our development decisions. As we build solutions specifically for the mid-market, they must address enterprise aspirations on a limited budget. More importantly, our solutions must be powerful, yet still fit within a highly complex IT environment simply enough that we don’t cause “the Maestro” to lose sleep… or hair.
What do you think?