SAM (Serviceable Available Market)
The portion of the total addressable market that your business can realistically serve.
Definition
Serviceable Available Market (SAM) represents the segment of the Total Addressable Market (TAM) that your company can realistically target and serve based on your business model, geographic reach, regulatory constraints, and product capabilities. It's a more realistic assessment than TAM.
How to Calculate SAM
Basic Approach:
SAM = TAM × Percentage of TAM You Can Serve
Factors to Consider:
• Geographic limitations
• Product/service capabilities
• Regulatory restrictions
• Target customer segments
• Distribution channels
Real-World Example
B2B Video Conferencing Software:
- • TAM: $50 billion (global enterprise communication market)
- • Can only serve English-speaking markets: 60% of TAM
- • Focus on companies with 50+ employees: 40% of addressable
- • SAM = $50B × 60% × 40% = $12 billion
SAM represents the realistic market opportunity after constraints.