Medium-Sized Enterprises Invest More in IT, But Remain Less Ambitious Than Larger Organizations, Says IDC Survey

London – April 28, 2008 – Medium-sized enterprises with 500-1,000 employees are less ambitious in their IT use than large enterprises, but have nevertheless increased their IT budgets faster in 2008 than large organizations. This is clearly shown in IDC's annual enterprise services survey including almost 200 enterprises with 500-1,000 employees.

Almost half of the survey participants had increased their IT budgets for 2008, a share a little above that of larger enterprises, and their increases were also slightly larger. Services are a key investment area. Security still tops the investment agenda followed by infrastructure modernization and application modernization. New software solutions have a lower priority.

Just like large organizations, medium-sized enterprises want to align their IT infrastructure better with the business and want to improve IT service levels to the business, but they have less experience of how to do that. They therefore plan to buy more consultancy services to understand how best to realize their strategic goals. This is good news for the consulting industry, although economic uncertainty is likely to dampen consulting spending.

Two-thirds of medium-sized organizations already use outsourcing to some extent, and a third are ready to invest in more or invest for the first time. But cost reduction is a more important driver of outsourcing spend for these organizations than it is for larger enterprises – the latter see outsourcing as a tool for business innovation leading to better alignment of IT with business. Medium-sized enterprises generally have not considered outsourcing as a driver of innovation, and vendors should help them by explaining its potential better.

"It is interesting to note that medium-sized enterprises are investing strongly, following similar strategies to those of the largest enterprises," said Consulting Director Mette Ahorlu, of IDC's European Software and Services group. "However, their thinking around IT is closer to that of a few years ago in large enterprises. Their lower level of internal technical knowledge and experience leads them to rely more strongly on advice from vendors, which should adapt their messages to this fact when addressing the segment.

"This means that medium-sized customers must have major confidence in their service provider, and that the existing relationship plays a much stronger role in this segment than among larger enterprises. They need to buy more standardized services, which are cheaper and easier to consume, and vendors need to present them with clearer and fewer choices in order to make the buying process less painful. However, although vendors see these enterprises as medium sized, they often see themselves as large and they don't see size as a major determinant of their IT needs. The specific character of each vertical industry plays a much stronger role than organizational size, and vendors should not approach medium-sized customers with a generic 'SMB strategy,' because these customers expect a more focused, industry-specific approach from their vendors."

The results of the survey of 196 enterprises with 500-1,000 employees are presented in the study 2008 Survey: Western European Medium-Sized Enterprises Less Mature Than Large Enterprises – Investing to Catch Up (IDC #Q65Q, April 2008). The study focuses on:

– 2008 budgets and investment priorities

– IT strategy

– IT investment decision processes

– How to attract the medium-sized enterprise's attention

– Vendor selection criteria

– Outsourcing

To purchase this document, contact your nearest IDC office or visit

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data prepared by named party/parties. Further information on M2 PressWIRE can be obtained at on the world wide web. Inquiries to