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Mid market still planning to invest in IT

Brexit might be causing some concerns but overall the mid market is very positive about the rest of the year and is planning to spend on cloud services

The mid market has long been one of the number one target areas for the channel given its status as a fast growing segment of the economy and a customer base that needs to work with partners to achieve its IT ambitions.

The good news is that budgets in that segment are set to rise this year according to some research from cloud and data centre player Node4.

The dark cloud that goes with the silver lining is that Brexit is causing some concerns with business leaders worried about the impact that the process to leave the EU will have on their prospects.

On the bright side 77% of mid market firms are expecting budgets to rise this year with a decent number (22%) of that total looking forward to more than a 10% increase.

Hosted and cloud-based services are taking a large share of that budget with IaaS and security as a service the two top areas.

Managed services and disaster recovery as a service will also be technologies that attract some of the budget from customers over the rest of this year.

But a third of those quizzed did have some concerns about Brexit and many thought that the channel could be doing more to support them through potentially challenging times.

“Mid-tier companies are the engine of the UK’s economy, so it is promising to see investment taking place in the IT infrastructure that will help to fuel further growth. It is no surprise that mid-market companies are embracing the cloud, which affords a huge opportunity to drive efficiency, agility, scalability, and to empower workforces," said Paul Bryce, business development director at Node4.

“Despite the current challenging business climate, the mid-market is the fastest growing sector in the UK economy, and policy-makers, investors and IT vendors alike should focus on enabling this growth. Fast-growing companies need to work with an IT partner that can help their infrastructure scale to embrace new staff, locations, and acquisitions," he added.

The Node4 findings chime in with the general trend in the market, where IT spending is expected to grow over the course of 2017. Gartner is looking for 1.4% worldwide IT spending growth this year, which would be up from the 0.4% that was expected last year.

The analyst house had been expecting things to be better but blamed exchange rate issues for the revision downwards over the course of the first quarter.

"The strong U.S. dollar has cut $67 billion out of our 2017 IT spending forecast," said John-David Lovelock, research vice president at Gartner. "We expect these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017."

Top priorities

The Node4 research revealed the top three concerns for IT decision makers at companies with a turnover of £15-£800m

1. business growth
2. security
3. reducing operational costs

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