Defining What the Terms 'Midmarket' and 'Midsize Business' Mean

If you think the word “midmarket” might apply to your company, read on, as we explore the elusive meaning of this widely used (and perhaps misused) term.

As a midmarket marketing guy at Avaya, a major technology company, I’ve found that the definition of midmarket–or even midsize business for that matter–seems to depend on who you talk to and where in the world you live.

Related article: Five Unique Ways that Midsize Firms Deploy Unified Communications

So why should you care? We believe there are several real attributes that are common to midmarket 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 midmarket.

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 midmarket, 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 midmarket 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 midmarket 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, midmarket 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 midmarket, 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?

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