WSJ writes about the efforts of the big software companies to target small and medium-sized businesses (SMBs):
France is a good example of the potential for these software giants – there are around 2.9 million companies with less than 500 people in the country – but also the pitfalls.
One indication of the potential is a segment like the accounting profession, where more than half of French SMBs have software providers whose share of the market is less than 1%, typically small companies themselves lacking the resources and domestic, let alone international, reach to give them a competitive edge.
But there’s plenty of competition too. Take a company like the U.K.’s Sage, which is hoping to replicate its success in tapping the middlemarket at home and in the U.S. through local acquisitions, and now stands as France’s leading supplier of software to small accounting firms.
These second-string software companies, focused on the middlemarket in France, like Sage, privately held CCMX, or Cegid (F.CEG) won’t necessarily be quaking in their feet at the looming competition from their bigger brethren.
The reason: the critical importance of local knowledge, expertise in particular sectors and proximity to the customer that allows the many second-tier companies to provide tailor-made products to SMBs.