The 1 Million Customer Niche

Scale was recently placed in the “niche” quadrant of Gartner’s “Magic Quadrant,” the assessment this research firm does of various technology industry segments. We’re happy to be recognized as an industry player, given that last year they excluded us entirely. Gartner views the SMB and Midmarket customers we serve as a niche of more than 1 million companies globally, and it’s a niche we proudly stay focused on.

I curiously asked Gartner what went into these relative rankings. After all, IDC (a competitor to Gartner) had recently placed us near the front of the pack (and ahead of VMware) in terms of both strategy and capability, and fellow tech gurus TechTarget earlier wrote about us “They have the best technology, not just for SMBs but many larger shops as well.”

So, Gartner clarified: “This is not a direct measure of product attractiveness. Indeed, only 3 or 4 of the parameters that drive vendor positioning are directly product related.”

Alllllrighty then. It strikes me that for a technology vendor to not have the quality, usefulness, or “attractiveness” of their products make up a significant part, if not the majority, of such a landscape report strikes me as a bit odd, given, of course, that we are in the business of providing useful technology products to customers… but to each his own.

I suppose this helps out vendors such as Nutanix, who infamously refuse to have their products publicly reviewed and tested (which also strikes me as strange and leaning toward bizarre, but it’s their call).

So what, exactly *does* make up a vendors position in this report? Your guess is as good as mine. (Is it an algorithm based on the abacus that was also used to construct The Leaning Tower of Pisa perhaps, as a fellow technologist suggested to me?) Our HC3 product has been declared to be the best technology in the space per TechTarget as Product of the Year; we are among the market leaders in hyperconvergence per IDC; and with over 1,200 customer deployments of HC3, we are at or near the top in terms of installed production systems in the hands of actual customers.

Perhaps the answer is within the report itself. As reported by The Register covering the research: “Scale Computing wins praise for sticking to its small-to-medium business niche.”

And there you have it: According to Gartner, the SMB and midmarket constitute a “niche.” By other research published by Gartner itself last fall, this “niche” – which they define as companies with 100-1000 employees — constitutes over 300,000 businesses in the USA and 1 million companies worldwide.

About two months ago I made a post on Spiceworks (an IT website where this “niche” likes to hang out) in response to a prospective customer who was concerned about going with a newer vendor. The response was well received and reposted and tweeted as an example of “giving a damn about the customer.”

I’ve pasted an excerpt of that posting below for this reason: We are very proud to be focused on the needs of the SMB and midmarket. We’ve been this way from the beginning of the company, and we aren’t changing our model to satisfy Gartner and the MQ. Call it a million-company-niche if you will, but it’s our niche and we are happy to be the #1 vendor serving it.

[Repost from Spiceworks thread] “I started Scale specifically to focus on small and midsize IT environments. We built our products that way, we built the support organization that way, and we’ve built the entire business that way. Perhaps it’s not as glamorous as focusing on the top 100 or taking Fortune 500 executives out to play golf, but that’s simply not how I wanted to build this business. When you call support, you get an engineer in the USA who intends to solve the problem on that first call. We only offer 24/7 support and we get very high marks for it. And I personally visit as many of our customers on site as I can, and I see the real environments where our customers run… a converted coat closet at a hospital, a hallway behind the mash tun at a brewery, in a basement of a bank in rural Georgia… all kinds of interesting places (and perhaps none as fun as the brewery)”

Besides defining our customers as a niche, a friend forwarded me the following chart, referenced in the In Tech We Trust Podcast (I do not know if they are the inventors of this humorous chart, but it was sent to me along with the podcast link). It is, perhaps, the simplest explanation of how Gartner places vendors in these reports.

Screen Shot 2015-08-17 at 12.41.03 PM

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