Vendors large and small are hoping to boost their bottom line by targeting midmarket companies with new technologies. Even large vendors like Oracle Corp., SAP AG and IBM have taken up the call, despite their traditional focus on the largest global businesses.
Some CIOs, finding themselves beleaguered with calls from enthusiastic salespeople, have had to find creative ways to duck small and midsized business vendors just so they can keep their IT projects running on time.
"I've had to build my own personal firewall," said Sam Segran, CIO of Texas Tech University in Lubbock. He has any sales calls routed to an employee who analyzes vendors and gives him weekly logs with summaries of the sales pitches.
When the phone rings in George F. Rae's office, chances are good there's a vendor on the line. Rae, IT director with Memphis, Tenn.-based engineering firm Lurgi PSI Inc. said he receives a barrage of calls from IT vendors -- often calls that start as "surveys" and quickly devolve into sales pitches.
"I'm just putting the phone down and telling them, 'No,'" Rae said.
A growing number of vendors have decided to take their turn at courting the midmarket more aggressively in recent months, years said Brent Jones, manager of IT security for Troy, Mich.-based Entertainment Publications Inc. "The assumption is that it is fertile ground," he said. Plus, he said, midmarket companies such as his are more likely to buy services, along with products, thereby increasing the margin on each sale.
But, Jones said, there is an upside: Vendors are also now taking more time to learn about the market and offer appropriate products. "They have a much better understanding of what midmarket companies need than they used to and they are making changes to products."
Anthony Green, information technology manager with New York-based Rheem Water Heaters, was able to take advantage of that. He has been searching for a backup to his storage software from Veritas Software Corp. Many vendors have been offering products in a $400,000 range -- 40% of his annual IT budget -- much more than he wanted to spend. Finally, he was approached by EMC Corp., which priced a midmarket product for only $120,000.
But not all businesses are finding that vendors really understand their needs. Yuri Romero, IT director with PBM Graphics Inc., a Research Triangle Park, N.C.-based printing company, said that he receives plenty of sales calls from large enterprise resource planning vendors. But they do not offer software that meets the needs of his business.
Now, when he gets sales calls, he starts off with a barrage of questions and when the vendor says he can't meet those needs without customization, Romero ends the conversation.