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Management & Strategy

Midsize Businesses Eye Analytics and the Cloud with Increasing IT Budgets

According to a recent study released this morning by IBM, more than half of midsize companies are planning to increase their information technology (IT) budgets over the next 12 to 18 months.

According to a recent study released this morning by IBM, more than half of midsize companies are planning to increase their information technology (IT) budgets over the next 12 to 18 months.

IBM’s global study of more than 2,000 midsize companies from more than 20 countries, revealed that top IT initiatives include analytics, cloud computing, collaboration, and customer relationship solutions.


Surprisingly, the study didn’t mention very much about mobile. I expected more on mobile. This is interesting, as earlier this week a report from Sybase said that 90 percent of U.S. and UK IT managers are planning to implement new mobile applications this year, while InformationWeek Analytics released a report yesterday, also showing a spike in mobile application adoption. The reports from Sybase and InformationWeek Analytics are typically focused on the enterprise, but are midsize businesses really missing out on the benefits of mobile technology by not making it a top priority?

IBM reports that with their increased investment in IT, midsize firms are looking to striking a balance between solutions that drive short term cost savings and those that enable revenue growth and stronger customer relationships. The study found that 70% of midsize companies are actively pursuing analytics technology to better understand their customers, make better decisions and become more efficient.

IBM hopes businesses do spend on analytics, as it has invested heavily in its analytics portfolio, including an acquisition of Netezza, a business Analytics Solutions Provider for which it agreed to pay $1.7 Billion Cash for back in September.

IBM also says that midsize businesses are reaching to the cloud, with the study showing growing adoption of cloud computing, with two-thirds either planning or currently deploying cloud-based technologies to improve IT systems management while lowering costs.

Other key findings from the report, “Inside the Midmarket: A 2011 Perspective,” commissioned by IBM and conducted by KS&R include:

• 53% of respondents expect their IT budgets to increase over the next 12 to 18 months, 31% expect they will remain unchanged and 16% think they will decrease or are unsure.

• Security (63%), customer relationship management (62%) and analytics / information management (59%) were cited as their “Most Critical IT Priorities.”

• 75% plan to upgrade their core IT systems to improve performance, security and reliability.

• Top expected benefits from cloud computing include cost reduction, better manageability of IT, improved system redundancy and availability.

• To achieve their technology objectives, more than 70% plan to pursue a consultative (IT and business), versus purely transactional relationship with their primary IT provider.

• Top barriers to IT adoption cited were cost, difficulty in acquiring and deploying technology solutions, and lack of IT skills and resources.

“The survey findings show that midsize firms are tackling a new set of opportunities to advance their role as engines of economic growth,” said Andy Monshaw, General Manager, IBM Midmarket. “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.”

Comparisons between the current study and those from 2009 also reveal a shift from a predominant focus on cost control and efficiency to a greater emphasis on growth initiatives. Today, 21% characterize their strategic mindset as ‘efficiency and cost control’, with the majority (79%) concentrating on customers, growth and innovation. In 2009, 53% characterized their company mindset as one of efficiency and cost control”, with less than half (47%) focused on growth, innovation and customers. This change is reflected in the increased adoption of analytics and predictive technologies that have become more affordable and widely available for midsize companies.

Written By

For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.

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