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Midmarket Building Clouds

Midmarket IT Sales Show Strength, But…

At first glance, strong midmarket revenue growth in the first half of 2015 could allow IT budgets to loosen up for the rest of this year. However, profit pressures could force CFOs and CIOs to keep a watchful eye on Capex and Opex IT expenses.

Golub Capital IndexFirst, the good news. Midmarket companies saw their revenues grow about 9.26 percent in Q2, up from 7.24 percent in Q1, according to Golub Capital, a midmarket lender that tracks about 150 privately held companies in the sector.

Midmarket sales were particularly strong for IT companies, which generated 9.46 percent revenue growth in Q2 2015.

Still, midmarket companies continue to face challenges. Chief among them: The rate of profit growth has been flat and profit margins fell in the first half of 2015 amid rising labor costs and the stronger US dollar, The Wall Street Journal noted.

Elsewhere, surveys indicate that midmarket CIOs are willing to increase their IT spend in three areas: Cloud computing, business intelligence, and the automation of business processes. Those may be your fastest paths toward more midmarket IT sales.

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