Serviceable Available Market (SAM)

Total addressable market estimates the entire revenue opportunity for a type of product. SAM narrows this down to the customers the company's specific offering can actually serve.

For example, the global market for accounting software might be worth 1,000,000,000 a year. A company whose software is designed for small businesses and sold only in English-speaking countries might have a SAM of 200,000,000, because larger companies and other regions are outside its reach.

SAM is shaped by factors such as the product's features, price point, distribution channels, language, regulations and the customer segments the company targets.

SAM helps companies and investors judge a realistic growth opportunity. A huge total market means little if the company can only serve a small part of it. Expanding into new regions or customer segments, or adding product features, can increase SAM over time.