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1/13/2011
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53% Midsize Businesses Plan To Increase IT Spend

IBM study finds midmarket companies are shifting their primary focus from cost cutting to infrastructure investments, the cloud, and business analytics in 2011.

Top 10 SMB Predictions for 2011
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Slideshow: Top 10 SMB Predictions For 2011

53% of midsize businesses plan to spend more on IT in 2011, according to a study released Friday by IBM.

Perhaps even more indicative of brighter days ahead: Just 21% of firms cited operational efficiency and cost reductions as their "top strategic mindset" for IT, a 32-point drop from IBM's previous midmarket survey one year ago.

That's not to say that costs are no longer a concern: 76% listed it as a "critical business priority," making it the one most commonly cited by businesses. But costs are not necessarily the dominant driver of IT budgets for 2011.

Customer focus was the primary mindset for technology spending in this year's report, with 31% of respondents listing it as most important, a jump of 20 points compared with the 2010 version of IBM's study. Revenue growth -- rarely a bad pair of words in the business world -- was a close second, with 30% listing it as the primary strategic goal for IT budgets. Innovation ranked fourth (out of four choices) with 18%

"It's clear to us that we're seeing a shift now in people looking forward and growing their business, and leveraging technology to do that, rather than just looking for cost controls," said Ric Telford, vice president of cloud services for IBM.

"Inside the Midmarket: A 2011 Perspective" was commissioned by IBM and conducted by an independent firm. It included 2,112 businesses -- all with between 100 and 1,000 employees -- across the globe and a variety of industries.

So where are those swelling budgets going? Among the study's "top IT project implementations worldwide," which measured projects in progress (but not yet completed) and those planned for the year ahead, the leading category was infrastructure improvements: Three out of four respondents have an upgrade underway or something in the works.

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