Cloud, Analytics Will Drive Midmarket Growth

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

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



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