Serviceable addressable market
sam (rhymes with ham)
The portion of TAM that your product can actually serve given your current capabilities, geography, and distribution.
SAM is the slice of TAM you can actually reach. Your product only works for mid-market companies? SAM excludes enterprise and SMB. You only sell in North America? SAM excludes the rest of the world. Your product requires Kubernetes? SAM excludes companies that do not use Kubernetes.
SAM is more honest than TAM. It acknowledges that your product is not for everyone. A $50B TAM sounds impressive until you realize your SAM is $500M because your product only works for a specific segment in a specific geography with a specific tech stack.
SAM grows as your product expands. Add enterprise features and enterprise accounts enter your SAM. Launch in Europe and European companies enter your SAM. Support a new platform and that platform's users enter your SAM. SAM growth is a concrete measure of market expansion.
Examples
A developer tools company calculates SAM.
TAM: all companies that deploy software ($10B). SAM: companies with 50+ developers using cloud infrastructure in North America ($1.8B). The product requires cloud-native deployment, which narrows the market significantly.
SAM expands after adding a new integration.
Before: the product only integrates with AWS. SAM: companies on AWS ($800M). After adding GCP and Azure support, SAM jumps to $2.1B. One product decision tripled the addressable market.
SAM informs go-to-market decisions.
SAM analysis shows 60% of serviceable market is in financial services and healthcare. The company hires two industry-specific AEs and builds compliance features for both verticals.
In practice
Read more on the blog
Frequently asked questions
How is SAM different from TAM?
TAM is the total market. SAM is the portion you can actually reach with your current product, distribution, and go-to-market. TAM includes companies that cannot use your product. SAM does not.
How do you grow SAM?
Expand product capabilities (support new platforms, add enterprise features), enter new geographies, and serve new customer segments. Each expansion adds companies to your SAM that were previously unreachable.
Related terms
The total revenue opportunity if you captured 100% of the market. The theoretical ceiling, not a realistic target.
The realistic share of SAM you can capture in a defined period. Your actual revenue target, grounded in competitive reality.
A description of the company (not person) most likely to buy, succeed, and expand with your product. Your best-fit customer.
A group of customers or prospects that share common characteristics. How you divide the market into targetable groups.
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