Cloud, Analytics Will Drive Midmarket Growth

By Jennifer Lawinski  |  Print this article Print

A survey of more than 2,000 companies finds that cloud computing and business analytics solutions that drive growth and innovation are top IT priorities for the midmarket.

The midmarket is investing in IT again, and it’s focusing on IT infrastructure improvements, collaboration, business analytics and business performance management, according to a survey from IBM. Fifty percent of companies surveyed plan to increase their IT budgets in the next 18 months.

IT investments, however, had to align with business goals and drive growth, innovation and customer value, the survey found.

"What I’d say the big finding here is that companies are now focused on growth and growth of the business. The last survey was all about cost containment and cost cutting. This survey is all about growth. Inside the growth, the top areas are business analytics, cloud computing and customer insight CRM … So what we’re finding here is not only are they shifting to growth, they’re shifting to growth in the leading-edge areas," said Andy Monshaw, general manager of IBM Midmarket.

The survey asked 2,112 business and IT decision makers at midmarket companies, with between 100 and 1,000 employees, what their IT priorities were in the next 18 months. Participates came from 20 countries, including the United States and Canada. IBM conducts similar inquiries once every 18 months.

The survey, "Inside the Midmarket: A 2011 Perspective," found that 70 percent of companies are actively pursuing analytics solutions hoping to gain improved customer insight, increased efficiency and better decision-making capabilities. Cloud computing is also growing in the midmarket, with two-thirds of respondents saying they are planning to implement or are currently implementing cloud-based solutions.

More than 75 percent are looking to make infrastructure upgrades. Companies cited security (63 percent), customer relationship management (62 percent) and analytics/information management (59 percent) as their most critical IT priorities.

"We've seen a boom in the number of midsize customers within the Consumer Products space who want to engage with us around business intelligence and cloud," said Jay Hakami, president and CEO of Sky IT Group, in a statement. "IT departments in midsize markets are adopting 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."

Between 2009 and the most recent survey, midmarket companies have also shifted away from cost control to put a greater emphasis on growth and higher-end solutions like analytics.

For solution providers looking to grow midmarket business, one finding in particular should be noted. More than 70 percent of the companies surveyed said they were looking for a consultative relationship with their primary IT provider.

"The channel has to think about 'How do I participate in business analytics? How do I participate in cloud computing?’ Because it’s not a point-product market -- even more-so than before.  Again, with every statement there’s always 50 caveats. It doesn’t mean straight-up resellers can’t make a living and are going to disappear. It does mean they need to evaluate their customers buying patterns and buying requirements. They’re going to see more and more application-led buying and solutions-lead buying," Monshaw said.

"Partners who have evolved their business model to have some sort of services, tend to be better off because the clients are willing to pay for that value," he said. "The cloud is real for this space – so understand how you’re going to participate. And its time to get on the analytics bandwagon here, because that’s what the clients are buying. Those are the two big takeaways."