IBM: Medium-Sized Firms To Spend More On Cloud

Chris Preimesberger,

An IBM report has found that medium-sized companies are planning to increase IT spending in 2011, with cloud technology to benefit

Study after study has been released lately talking about trends in future IT spending. Most of the ones eWEEK has seen are optimistic in outlook for 2011, following challenging years in 2008 and 2009 and an even-keeled 2010.

IBM joined the bullish-thinking crowd on 14 January with a report of its own, and when IBM talks, people listen. So this research has some extra gravitas attached to it.

Spending increase

Big Blue reported that more than half of the 2,000 midsize companies (in 20 countries) it polled are planning to increase their IT budgets during the next 12 to 18 months. Specifically, 53 percent of responding IT managers expect their budgets to increase over the next 12 to 18 months.

And on what will they be spending their increased resources? The reports indicates that these companies are planning new investments in a number of hardware, software and service areas, such as business analytics, cloud computing, collaboration, mobility and customer-relationship packages.

“Inside the Midmarket: A 2011 Perspective”, (free PDF download) commissioned by IBM and conducted independently by KS&R, Inc., also found that a full 70 percent of midsize companies are seriously considering adding business analytics to better understand their customers and make better decisions.

The report also shows what many knowledgeable IT people have known for a few years: That there clearly is growing adoption of cloud computing among midsize firms. A full two-thirds of respondents are either planning or currently deploying cloud-based systems.

Other findings:

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