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Cloud, Security Top Midmarket IT Spending: Survey

“I’m actually a little surprised that cybersecurity is in the No. 2 position. Typically every survey we’ve been doing recently, cybersecurity is No. 1 in terms of spend,” says Adam Dennison, vice president of Midsize Enterprise Services for CRN parent The Channel Company.

Many midsize companies say they are investing in cloud-based services first, and cybersecurity second, when it comes to expanding their IT infrastructure.

The July survey results from midmarket companies­ -- those with $50 million to $2 billion in revenue -- revealed IT infrastructure and market trends and were presented at The Channel Company’s Midsize Enterprise Summit in Dallas, Texas on Monday.

“All of the discussions I’m having with most of the IT leaders here in the midmarket are saying they are fast-forwarding and looking toward growth,” said Adam Dennison, vice president of Midsize Enterprise Services for CRN parent The Channel Company, during his keynote speech.

According to the survey, 91 percent of companies said hybrid work models are here to stay within their companies. Fifty-nine percent said cloud-based services will also continue within their company.

One takeaway Dennison found from an earlier survey from spring 2021 is that many companies’ IT spend in 2021 will outpace 2020 IT spend. 

[Related: These 33 Top Tech Companies Put Employees First: People Magazine]

 To support a remote and/or hybrid work model, the majority of companies’ IT spend will go towards expanding cloud-based services, according to the survey results. Cybersecurity solutions came in second.

“I’m actually a little surprised that cybersecurity is in the No. 2 position,” Dennison said. “Typically every survey we’ve been doing recently, cybersecurity is No. 1 in terms of spend.”

But many companies are approaching cybersecurity with concern. The survey indicated that 45 percent of companies periodically assess their cybersecurity practices while 21 percent informally review those same practices.

“What I found interesting here is when we asked this question just a few months ago, the combined total there from those top two spots was 55 percent,” he said during his presentation. “That has jumped 7 percent to 62 percent.”

And when it comes to cybersecurity, 65 percent of companies said increased cybersecurity spending would be impactful to their business, according to the survey. Companies also said increased user awareness about security would help their organizations.

The majority of the midsize companies, 52 percent, said there are only a few gaps in their IT skills and capabilities, while 34 percent said there were moderate gaps.

Companies also said 35 percent of their business is related to digital. They expect that to grow to 48 percent by 2024, Dennison said. Those numbers increased by five percent and four percent, respectively, since the spring survey.

Bob Hestand, chief information officer for Neil Kelly, a remodeling services and home improvement company based out of Portland, Oregon, said his biggest takeaway from the survey was that IT leaders are becoming more involved in business strategy.

Going forward, he plans to focus on “moving more things to the cloud (because that’s) less infrastructure that is at risk for ransomware,” he told CRN.

Sam Gray, director of information technology of JAT, a Fort Wayne, Indiana-based trucking company, said the survey’s findings reaffirmed what he’s already seeing in the market.

In 2022, he said JAT is on track to migrate its internal on-prem IT infrastructure to a cloud-based model, which will help with security.

“The key piece of that is our internal database. We’re actually migrating that to Azure,” he said.

“Our truck management solution…which is software used to do everything from dispatching our trucks to managing our drivers to billing our customers, receiving orders…that’s all an integrated solution. So I’m migrating that to Azure.”

He’s also migrating all user interface platforms to be delivered through Citrix.

“This is going to simplify a whole lot of other processes and policies, like with security,” he said. “We’re not having to back up the internal infrastructure locally and then offload it off site. That migration itself is a key component in moving forward with next gen stuff instead of just having it all there on site, having it susceptible to all kinds of disasters that I don’t want to see happen.”

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