CRN Research: Midmarket Heats Up; Renewed Interest In E-Commerce, Linux/Unix

Within the midmarket, defined by CRN as companies with between 100 and 999 employees, the focus of this renewed spending interest (at least among the 11 Internet-related categories surveyed) is in e-commerce related areas such as supply chain management and online payment systems are seeing significantly higher levels of interest from midsize company executives, on a sequential as well as a year-over-year basis.

Supply chain management, for example, realized a 9.5 percent increase in its relative importance as a spending priority in the May survey compared to the February survey, and a 19.8 percent gain in May 2003 compared to May 2002. (For additional data, see CRN's Hardfacts.)

CRN first observed increased business interest in e-commerce in the April 2003 survey of small business technology executives, which found that the among Internet-related spending categories, the three showing the highest growth in relative importance as a spending priority (on a year-over-year basis) were all e-commerce related--online payment systems, CRM, and supply chain management. And like midsize companies, the size of the increase in relative importance between April 2002 and April 2003 was quite substantial.

It should be noted that solution providers are keying in on these increased sales opportunities. In April, the category of "e-business solutions" cracked the top 10 list of technologies that solution providers are selling, reselling or recommending to their clients, for the first time since CRN began collecting data in November. The percentage of solution providers selling, reselling or recommending e-commerce solutions has nearly doubled in recent months, from 19 percent in November to 34 percent in April.

CRN believes these trends reflect companies with existing e-commerce or Web-based infrastructure (perhaps first installed during the technology spending bubble) seeking to maximize or upgrade their investment with reality-based applications that are relative simple and inexpensive.

Hardware and software categories are sharing in the renewed spending interest among midsize company executives. In this area, the focus is clearly on servers and storage, according to CRN research data, with Unix-based servers being the standout.

Compared with the February survey, the relative importance of spending for Unix-based servers jumped 11.3 percent in April, while the increase was 13.9 percent on a year-over year basis, dwarfing the gains in any of the seven other hardware/software categories surveyed. With Linux servers included in this category, CRN attributes a large part of the increase reflects the coming of age of Linux-based technology in a business world where higher rates of return, and lower costs, are the new watchwords.

John Roberts is CRN's director of research. You can reach him at [email protected].