Annual Recurring Revenue

Detailed Description

Serviceable Obtainable Market describes the portion of the total addressable market (TAM) that a company can realistically capture or serve. It represents the market segment or target audience a business can reach and convert into customers based on its resources, capabilities, and market strategy. It helps identify the realistic revenue potential of a product or service.

How To Calculate

To calculate it, divide the previous year’s revenue by Serviceable Addressable Market and multiply it by the current year’s Serviceable Addressable Market. For example, a business generated $20 million in revenue last year. With a prior year’s Serviceable Addressable Market (SAM) of $1 billion, the market share was 2%. Based on this year’s SAM of $1.1 billion, the Serviceable Obtainable Market (SOM) would be 2% of $1.1 billion, amounting to $22 million.


ƒ (Sum(Last year’s revenue) / Sum(Last year’s SAM)) * Sum(This year’s SAM)
ƒ Sum(Market share) * Sum(This year’s SAM)


There is no standard benchmark for SOM. It involves assessing the company’s SOM against various factors, considering industry norms, and evaluating the effectiveness of the market strategy.

Related Metrics

Total Addressable Market
Serviceable Addressable Market
Annual Recurring Revenue


A good Serviceable Obtainable Market (SOM) aligns with a company's resources and capabilities, representing a realistic and reachable subset of the total addressable market.

The SOM metric is crucial to investors as it indicates a company's focused and realistic market strategy, aligning goals with achievable market segments and providing insights into potential growth within practical constraints.