Mid-size Companies Lay Out Priorities with Higher IT Budgets

More than half of the 2,000 mid-sized companies surveyed for a new study from IBM (News - Alert) plan to up their IT budgets this year and focus more on such tasks as security and cloud computing.

Commissioned by Big Blue and conducted by research & consulting firm KS&R, the study “Inside the Midmarket: A 2011 Perspective,” found that 53 percent of the mid-sized companies polled are eyeing an increase in IT budgets over the next 12 to 18 months. And while 31 percent don’t see a change in their budgets, only 16 percent feel their budgets will drop or just aren’t sure yet.

How will companies be spending their IT dollars? Among those surveyed, 75 percent expect to upgrade their core systems to beef up performance, security, and reliability. Security itself was named by 63 percent of those questioned as a critical priority. But customer relationship management (cited by 62 percent) and analytics/information management (cited by 59 percent) were also big on the to-do list.

Cloud computing was one more item of interest among the mid-size companies surveyed. Two-thirds of those polled said they’re either planning or already deploying cloud-based technologies, citing lower costs, better IT management, and less system redundancy as the primary benefits of taking to the cloud.

Comparing the current study with one from 2009, shows a change in priorities from just controlling costs and staying lean to actually generating growth. In the 2009 survey, 53 percent said the focus was on efficiency and cost control, while 47 percent were concentrating on growth, innovation, and customer relationships. But in a healthy turnaround, the latest survey found only 21 percent of the respondents focused on efficiency and cost control and a full 79 percent putting the spotlight on growth, innovation, and their customers.

The IBM survey echoes reports from such research firms as Gartner, IDC, and Forrester, which are all projecting higher IT spending this year. IDC (News - Alert) also believes businesses will continue to gravitate toward cloud computing, in particular adopting their own private clouds to run their business applications.

These reports give IT professionals some reason for optimism at the start of a new year as companies move out of mere cost-cutting mode and into more of a growth mode. An increased focus on tasks such as security, customer management, and cloud computing should give IT staff more of an opportunity to work with tools and technologies that will help move businesses forward.

Conducted during last year’s fourth quarter, IBM’s study questioned 2,112 business and IT decision makers at businesses with 100-1000 employees. The study hit several industries, including banking, consumer products, retail, and insurance, and stretched across the world to tap people in the U.S., Canada, the U.K., Germany, France, Italy, Japan, China, Korea, South Africa, and many other countries.