Midmarket IT Spending Turns the Corner

Michael Vizard
Slide Show

Top Midmarket IT Priorities

Midmarket IT organizations don't trail large-scale enterprise IT organizations by much when it comes to emerging technologies; they just have to figure out how to take advantage of them.

As the economy begins to slowly recover, optimism surrounding IT spending amongst midmarket companies with 100 to 1,000 employees appears to be rising commensurately.

According to a new global survey of 2,112 executives conducted by the market research firm KS&R on behalf of IBM finds that companies in this space are cautiously embracing new IT projects, as opposed to focusing solely on IT cost reduction.

That doesn't mean that IT cost reduction isn't still a top priority, says Ed Abrams, VP of marketing for IBM's midmarket business. But in many cases, midmarket companies are working with new applications in pursuit of new business goals, which results in slightly more than half of the respondents saying they will increase IT spending in 2011.

Specifically, the survey shows that there is a significant shift towards customer focus projects that are intended to help companies grow their revenue basis. As a result, Abrams says the study shows that there is increased IT spending being allocated for analytics, collaboration, customer relationship management (CRM) software, along with mobile devices and cloud computing services.

But the study also shows that the number one area of investment is in IT infrastructure and that security management is a top area of focus, which Abrams attributed to the fact that most IT infrastructure upgrades were postponed in 2010. But in order to run next-generation customer management applications, many customers are finding that they need to upgrade their servers and networking infrastructure.

Abrams says the interest level in cloud computing among midmarket executives took him a little by surprise given the nascent state of the overall computing model, so it will be interesting to see how quickly the midmarket embraces cloud computing in 2011.

When you peel back all the numbers it becomes clear that midmarket IT organizations have come to realize that they need to do it all in 2011. That means upgrading the core IT infrastructure, while helping the business stay competitive by introducing new applications.

That may be a tall order in some midmarket quarters. But when you get right down to it, says Abrams, this is the new normal for midmarket IT.

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