3 Reasons Why SaaS Applications Are the Obvious Choice for Mid-Market Wholesalers

Find out why SaaS applications are a complete no-brainer for any wholesale business, as well as how SaaS is catalyzing growth in the mid-market segment.

Sarah Leung
May 6, 2015

According to the 2015 Middle Market Power Index published by American Express, mid-market companies, defined broadly as companies with between $10 million and $1 billion in annual revenue, have created 92% of net new jobs since 2008. In a recent HSBC report, it was found that mid-market firms contributed $1.7 trillion in economic output in the United States alone. Says Derrick Ragland, Executive VP and Head of US Middle Market Corporate Banking for HSBC Bank USA, “Middle market companies tend to be highly productive, contributing more to GDP for each employee than other segments." Among the 55,700 U.S. companies in the mid-market, wholesale and retail firms account for a large chunk––25%, according to the Middle Market Power Index. But while wholesale companies in this segment are on the rise, they have their fair share of challenges, notably in the realm of technology. According to Venture Beat, “

The mid-market is still extremely fragmented, served by a multitude of highly specific software solutions for certain business types....Additionally, many vendors in this mid-market segment target specific geographic regions due to the complexity of their solutions and limited sales resources.” Increasingly, however, mid-market firms, including wholesalers, are reaching for a much more flexible, modern approach to their technology needs, and Software as a Service, or SaaS, may be the catalyst for the segment’s continued growth. Here are a few reasons why SaaS applications are a no-brainer for any mid-market wholesale brand.

Why SaaS Applications Make Sense for the Mid-Market:

1. Low-Cost, Low-Risk

Traditional enterprise software is purchased and installed on-premise on the user’s own servers. They are large up-front investments, and often difficult and expensive to maintain over time, requiring significant internal IT resources. By contrast, SaaS is defined simply as a software distribution model that involves software that’s hosted and maintained by a vendor, run in the cloud, and essentially “rented” to the user. As such, these solutions enable rapid time-to-value and require a smaller initial investment. Because the vendor is responsible for any maintenance, updates, infrastructure, backups, etc., the total cost of ownership is significantly reduced. This is especially attractive for mid-market wholesale companies, who may not have as extensive an amount of resources to expend on IT management as their enterprise counterparts. Indeed, in a fast-growing company, business complexity can quickly outpace available IT resources.

2. SaaS Helps Mid-Market Enterprises Scale More Easily

Many mid-market companies have technology needs just as robust as those of large enterprises. They are, however, much more agile, and can therefore “benefit disproportionately” from the flexibility that SaaS applications have to offer, says Venture Beat. For instance, because SaaS vendors allow companies to cede the responsibility of all maintenance and future updates, such software is infinitely more scalable. A great SaaS vendor is one that accommodates a company’s rapid growth without breaking stride. It’s future-proof, constantly improving and perhaps already serving much larger customers. In fact, because such solutions tend to streamline business processes and free up internal resources, SaaS software can actually engender business growth in the mid-market.

3. The Pressure to Provide an Optimal User Experience

In our world of smartphones, tablets, apps, and incredibly intuitive interfaces in our consumer lives, the workforce is looking for similarly simple experiences at work. People want business software that is easy to use, which is not a phrase generally applied to clunky enterprise software. Underlying that fact is the reality that companies are expected to deliver results more efficiently than ever before––with fewer resources. As information moves to the cloud and technology goes mobile, there is therefore significant pressure for businesses to streamline and modernize their software systems. The advantage of SaaS solutions, is that they were often developed with the user in mind. Vendors seek to make their offerings as easy to implement as possible, and they’re constantly improving the overall user experience. Ultimately, SaaS applications are the obvious choice for companies in the mid-market, who have the business complexity that requires robust solutions, as well as the relative resource scarcity that begs for a fast implementation––and even faster dividends.