Big Software Aims Small in 2003

Microsoft sells its products through a network of more than 4,500 partners. Building that channel of resellers can take 10 to 15 years, noted Gartner's Anderson. Both Great Plains and Best largely target the lower end of the middle market, he said.

Currently, none of the enterprise vendors have built a reseller channel that nears those of Microsoft and Sage. Gary Fromer, vice president, SMB and hosting at SAP America, acknowledged the company never pursued developing channel partners until now, which it is doing in part with its roving tractor-trailer road show.

"I think the big boys are best to sticking to the upper midmarket," Gartner's Anderson said. "That's where they've got best chance for success." That's because in the upper midmarket, the large companies can employ a hybrid model in which they sell direct -- as they're used to -- but rely on a partner for implementation and services.

Indeed, that's the model PeopleSoft has been following since its early entry into the middle market five years ago: The company has its own direct sales force and relies on partners for implementation. Of the enterprise vendors that have moved in the middle market, PeopleSoft has done the best job, Gartner's Anderson said.

"The organizations that we target and we work with are really those that have the same business requirements as larger companies," said Jeffrey Read, vice president and general manager of PeopleSoft Mid-Market. "It's a misnomer that smaller companies mean simpler in terms of the business requirements. Most have the same business requirements. They don't have the budget, they don't have the people, and they don't have a lot of time to get things done."