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Key
Midmarket Trends, Drivers and Inhibitors in 2004
By James A. Browning
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CIOs
and IT managers of midsize businesses (MSBs) face
continuous challenges in managing the growth and expansion
of their enterprises, and it is these issues that
vendors must address to be successful in the midmarket.
Adding remote offices and staff often requires MSBs
to add solutions and change IT architectures. For
example, the level of sophistication for networking
and security increases significantly for companies
as their employment levels and the need for multiple
office locations grows.
Further,
supporting the access requirements of mobile workers
has become increasingly important. More than 65 percent
of North American midsize businesses have mobile workers,
and while mobile PCs have become affordable, hardware
procurement is only part of the story. MSBs will have
to update their networking infrastructures in areas
such as virtual private network (VPN), help desk support
and security to support mobile users effectively.
Perhaps
the greatest challenge that MSBs face is meeting the
external, non-back-office needs of their businesses.
They increasingly face moving more internal business
processes and activities to the Web for increased
efficiency. Creating or enhancing collaboration across
the value chain also has increased interest in technologies,
such as customer relationship management (CRM) and
e-commerce. These functions are increasingly viewed
as critical core competencies, and we believe that
no other driver will change MSB IT infrastructures
and processes more than this externalization trend.
Indeed their survival and success may depend on establishing
competitive advantages through links to partners,
customers and networked resources.
In
general, MSBs have prioritized the following IT investments
for 2004:
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Infrastructure
upgrades and improvements – with strong
demand in hardware replacements and operating
system migrations |
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Security |
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Web enablement – including online transactions,
Web-access to information, customer-facing applications
and so on. |
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Business intelligence |
Gartner
research shows that MSBs plan to increase IT expenditures
more than larger enterprises this year. Most MSBs
cite operational efficiency and increased productivity
as the primary drivers for IT investment, with cost-cutting
being a secondary concern.
If
you have a question related to this article, e-mail
Jim Browning at midmarket@gartner.com.
James
A. Browning is Vice President and Research Area Lead
of the Small and Midsize Business Research organization
at Gartner, Inc.
Reference
Research
Note
SMB Market Penetration: More Vendors, Same Challenges
Publication Date: October 8, 2003
Authors: J. Browning, R. Anderson and R. Brown
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