Mid-sized Businesses Upping IT Budgets for Cloud Computing and Business Analytics, Seek Channel Partners
Updated IBM mid-market study shows new investments for innovation and growth in analytics, cloud computing, collaboration, mobility and customer relationships, suggests economic recovery may be gaining traction.
More than half of mid-sized businesses worldwide are planning to increase IT budgets in the next 12 to 18 months, targeting resources at cloud computing, business analytics, collaboration, mobility and improving customer relationships, according to a new study commissioned by IBM Corp. that suggests economic recovery may be for real.
IBM said that the survey findings revealed mid-sized businesses are shifting investment priorities more toward innovation and growth rather than the efficiency and cost control that dominated the industry in the past two years. Indeed, some 53 percent of the respondents expect their IT budgets to grow over the next year and a half.
"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, IBM Midmarket general manager.
Eighteen months ago, most of them were talking about cost and efficiencies, he said. Today, 80 percent of them are thinking about how to grow, connect with customers and innovate, Monshaw said.
A significant portion of resources likely is headed toward cloud computing, as nearly 70 percent of the studys participants plan to deploy cloud technology to improve IT systems and lower costs, according to the studys results.
Of note, about 70 percent of the respondents intend to work with a local channel partner in a trusted advisory role to help meet their technology objectives, IBM said. The vendor relies solely on channel partners to deliver solutions to mid-range business customers.
IT priorities include business analytics
Survey participants cited security, customer relationship management (CRM) and analytics as top IT priorities. In fact, 75 percent of the respondents intend to upgrade core IT systems to improve performance, security and reliability.
IBM said that about 70 percent of mid-sized companies in the study currently are implementing business analytics to improve efficiency or plan to do so in the near term. That finding is particularly important to IBM given its heavy concentration on building and promoting its business analytics portfolio.
Business analytics and predictive technologies used to be reserved once for big companies only, Monshaw said. Today these capabilities are easy to use, appropriately priced and a significant priority, he said.
In the past five years, the vendor has ponied up some $14 billion to add 24 business analytics companies to its stable. Most recently, IBM paid $1.7 billion to acquire Netezza Corp., a maker of data warehousing appliances based in Marlborough, MA.
Changing perspectives on growth, innovation
Comparing responses from last years study and this one suggests the participants are viewing growth strategies, IT innovation, and issues of cost and efficiency somewhat differently.
Data from similar research IBM underwrote last year indicated that mid-sized businesses, instead of cutting IT budgets, instead were redirecting resources to improve efficiencies, reduce costs and bolster relationships with customers.
In the 2009 study, more than half of the respondents focused their business strategy on controlling costs and improving efficiency and less than half were concerned with growth, innovation and investing in customer relationships.
By comparison, in the current survey nearly 80 percent of participants have homed in on building customer relationships, growth strategies and technological innovation, with only the remainder still concerned with efficiency and cost control, IBM said.
Recent economic disruptions have caused businesses of all sizes to rethink the fundamental role of information technology, Monshaw said.
Opinion Research Corp. conducted the 2009 study for IBM, which included 1,879 companies in 17 countries across the banking, retail, healthcare, consumer products, industrial products and manufacturing industries.