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3 Technologies Midmarket CIOs Crave

Call it a business and talent paradox: Midmarket executives are confident in the U.S. economy’s growth prospects. Those same executives sound a little conservative when it comes to hiring and capital expenditures, but they seem willing to open their wallets a bit wider to spend more on cloud computing, data analytics and automation of business processes.

According to Deloitte’s Mid-Market Perspectives: 2015 Report on America’s Economic Engine, released in June:

“1. Confidence in the U.S. economy remains high, mid-market revenue growth expected…The majority of mid-market executives (68 percent) expect their revenue to grow more than 5 percent while a quarter anticipate a significant jump of more than 25 percent in the next 12 months. Interestingly, a significantly higher number of companies versus a year ago (70 percent vs. 59 percent in Spring 2014) report generating more of their revenues from overseas.

2. Capital investments moderate, tech investments increase…Despite ongoing confidence in the direction of the economy and overall business growth, capital investments have slowed in the last 12 months…In order to remain in growth mode, mid-market players seek to adopt the latest productivity-enhancing tools and are prioritizing spending on technology.”

The tech spending priorities through June 2016 involve:

  • Cloud computing (58 percent vs. 46 in Fall 2014);
  • data analytics (53 percent vs. 40 percent in the fall); and
  • automation of business processes (43 percent vs. 24 percent in the fall).

On a down note, midmarket hiring has “cooled off since Fall 2014.” Deloitte noted:

“Although the majority (55 percent) of mid-market executives report increases in their domestic, full-time workforce over the past 12 months, there was a drop in the number of mid-market executives—to 58 percent from 63 percent last Fall—who plan to hire in the coming year.”

By the way, employee turnover in the midmarket also appears to be rising — potentially opening the door for IT service providers to more deeply engage customers that suffer IT talent departures.

Another good place for partners to start the conversation: Infrastructure consumes more than 50% of most midmarket IT costs, according to Gartner. Increasingly, that infrastructure involves converged data centers — wherein servers, storage and networking come together into a single system.

While the overall hardware market continues to get squeezed, spending on converged systems continues to grow — reaching $17.8 billion in 2016, up from $4.6 billion in 2012, according to IDC.

Long View Systems, a total services provider (TSP), promotes converged infrastructure from Cisco Systems, NetApp and VCE into its customer base. But the company also offers hybrid and pure cloud options — allowing customers to consume IT anyway they prefer, according to VP of Procurement Kevin Crowe.

And it sure sounds like midmarket executives are ready to consume more IT, according to Deloitte’s survey results.

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