Midsize Businesses Increasing IT Budgets, IBM Study Finds

IT budgets will rise over the next 12 to 18 months in over half of the midsize companies surveyed by IBM the company said. Its global study (Inside the Midmarket: A 2011 Perspective) of over 2,000 “business and information technology decision makers” at midsize companies (those with 100 to 1000 employees) in 20 countries found that enterprise priorities include “analytics, cloud computing, collaboration, mobility, and customer relationship solutions,” Big Blue said in a release.

According to the study, 70 percent of midsize companies “are actively pursuing analytics technology to better understand their customers, make better decisions, and become more efficient.” IBM says midsize firms are increasingly adopting cloud computing. Two-thirds of respondents are either planning to deploy or currently use cloud-based technologies; expected benefits include “cost reduction, better manageability of IT, and improved system redundancy and availability.”

Among the other results:

• Over half (53 percent) anticipate their IT budgets will increase over the next 12 to 18 months; nearly a third (31 percent) think it will remain the same, and 16 percent expect it to decrease or don’t know.

• Most critical IT priorities cited include security (63 percent), customer relationship management (62 percent), and analytics/information management (59 percent)

• Three-quarters (75 percent) are planning to “upgrade their core IT systems to improve performance, security, and reliability”

• IT adoption is hindered by “cost, difficulty in acquiring and deploying technology solutions, and lack of IT skills and resources”

According to Andy Monshaw, general manager of IBM Midmarket, the surveyed enterprises have changed their focus. "When we spoke to midsize firms 18 months ago, most were focused on reducing costs and improving efficiencies. Today, the conversation is also about expanding their business, connecting with customers, and gaining greater insights."

In fact, 79 percent say they are concentrated on “customers, growth, and innovation,” and only 21 percent say their strategic mindset is focused on efficiency and controlling costs.

"We've seen a boom in the number of midsize customers within the consumer products space who want to engage with us around analytics and cloud," said Jay Hakami, President and CEO of Sky IT Group, an IBM Business Partner. "IT departments in midsize markets are adapting very fast to that fact that they must do much more with less. Companies are looking to quickly identify tools and efficient ways to support growth and innovation."

You can download the 15-page report here. No registration is required.

-- James E. Powell
Editorial Director, ESJ

Posted on 01/14/2011