TECHNOLOGY TRENDS SURVEY
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1 TECHNOLOGY TRENDS SURVEY
2 EXECUTIVE SUMMARY More than 170 mid-market IT and business-line managers responded to a Technology Trends Survey conducted by SWC Technology Partners in August Respondents provided their opinions on technologies, strategies and tactics that are creating the greatest impact during this challenging economy. The majority of responders were IT senior leaders. They hail from organizations within the Illinois, Wisconsin and Indiana markets in industries that include manufacturing, retail, education, construction, healthcare, accounting and non-profits. More than half of the respondents manage environments with a user base between 100 and 2,000 individuals. Among the key findings (rounded to whole numbers): ECONOMIC IMPACT n More than 58% of companies reported lower revenues and 46% have seen decreased profit margins. n 62% of respondents report IT budget cuts and freezes. n Although most companies have held their IT staffing levels, staff reductions and outsourcing exceed staff increases. n 89% of respondents either maintained or increased market share. Only 11% reported they have lost market share in recent months. Analysis The fact that nearly 60% of respondents reported lower revenue and close to half have seen a decrease in profit is not surprising; the longest recession in history has taken a toll on nearly every business sector. What is noteworthy, however, is how the shrinking economy has translated into market share. The SWC survey found a surprising 89% of respondents reported either maintaining or increasing their market share. Several factors could account for this paradox. For certain, a recession will weed out poor performing providers and the net result will be an increase in share for the market leaders. In some cases it could be that those who gained market share found innovative ways to adapt to and capitalize on changing economic conditions for instance, harnessing new technologies to identify new customers and better serve the existing customer base. In either case, it appears that the survey respondents represent a more successful group of organizations than the general business population. 1 SWC TECHNOLOGY TRENDS SURVEY
3 PROJECT PRIORITIES n Respondents cited security as the highest priority technology project category, with 55% indicating security issues as highly important. Business intelligence was the second highest priority, with 38% of respondents citing it as highly important. Other projects of high importance involve storage, web development and LAN/WAN infrastructure. n The least important technology project category for respondents was proprietary systems, with 57% indicating it holds low importance. n Respondents selected systems management more than any other category as holding medium importance, with a 61% response rate. Other midrange priorities were collaboration and enterprise application integration. Analysis During a recession, or even as the economy emerges from a recession, IT departments are asked to prioritize projects based on the greatest impact to the business. Frequently these IT organizations are also asked to stretch manpower and resources past their intended functions. The fact that 56% of survey respondents identify security as the most important project category is interesting in that security projects tend to have little impact on generating revenue or even creating operational efficiencies. It is possible that this result reflects the fact that many organizations believe that this category has been neglected during this recessive period and fear the consequences of such neglect. Another answer could be that these managers are focusing their limited resources on core areas that cannot be compromised. In both cases, empirically, security is clearly an area of focus for the mid-market. STAFFING MODELS n The biggest increase to staff (13%) as well as outsourcing (6%) falls under the category of application development. n End-user support was selected most often by respondents as experiencing a reduction to staff (13%). Analysis Over the past 12 months, many mid-market companies saw a decrease in budget. In some cases, IT organizations were required to change their staffing models to accommodate these changing budgets. Respondents results indicate that over the last 12 months the greatest loss to internal IT staff took place within end-user support, network management and management. These figures may reflect the growing trend to outsource these functions to a third party through managed services. It should also be noted that while these changes occurred more than any other change to the staffing model, it was only found in a combined 15% of survey respondents. IT staffing remained about the same for other respondents. This may imply that while there is a growing outsourcing trend it has yet to become an industry or market segment standard. All categories surveyed saw a net decrease to internal staff. In relation to all categories, application development saw the least loss of internal staff. This may not be surprising as internal application teams typically support complex, customized ERP and/or proprietary environments that are mission-critical to the enterprise. Wholesale changes to these teams are typically the result of changes in strategic direction rather than economic pressure SWC Technology Partners. All rights reserved. 2
4 TECHNOLOGY RETURN ON INVESTMENT n 41% of survey respondents cited virtualization as the technology with the greatest ROI justification. n Those surveyed indicated virtualization (109), collaboration/document sharing (97) and web development (90) as most often having either high or medium cost justification. n Respondents rated proprietary systems as having the lowest ROI justification. Analysis The issue of Return on Investment (ROI) has been thrust to the forefront of any mid-market business decision. Determining which technologies will provide the greatest, and more often, the fastest ROI has become a first step in selecting which projects to advocate to senior leadership. As always, there are some technologies that provide a better answer than others. Virtualization is the clear winner in this category, a finding that s not surprising. Virtualization technology consolidating multiple computing environments into virtual servers that run on the same physical machine has become a widely adopted and accepted platform to consolidate and manage server infrastructure, thereby reducing costs associated with hardware acquisition and management as well as reducing the physical footprint of the server room itself. Also not surprising is the finding that collaboration/document management was another well-noted area of ROI. Technologies in this space, such as Microsoft SharePoint, provide great efficiencies around workflow and business processes. Enhancements to document management reduce inefficient periods of search and content creation. RELIANCE ON A SINGLE INDIVIDUAL n 40% of respondents indicated that their organization is absolutely dependant on a single individual for his or her systems knowledge and/or expertise. n 68% of respondents indicated that they either currently are or used to be absolutely dependant on a single individual for his or her systems knowledge and/or expertise. n Only 8% of respondents indicated that they never had an absolute dependency on a single individual for his or her systems knowledge and/or expertise. Analysis Over time this dynamic has presented itself frequently within the mid-market, and the SWC survey responses support the fact that dependency on a single IT professional is relatively prevalent. The question of risk or whether or not this is an acceptable scenario is not addressed in the survey, but it is hard to imagine many organizations not understanding the vulnerabilities this situation presents. Challenging economies, reduction in staffing models and islands of dependency can become a recipe for disaster. It may be this formula that has led to the increase in managed environments noted earlier. 3 SWC TECHNOLOGY TRENDS SURVEY
5 SWC TECHNOLOGY TRENDS SURVEY
6 1. What is the number of network users within your enviroment? A. Less than 25 B. 26 to 100 C. 101 to 500 D. 501 to 2,000 E. Over 2, % 23.1% 38.5% 21.9% 10.7% Question answered 169 Question skipped 1 2. Your role in the organization is best described as A. IT senior leadership B. IT management C. IT staff D. Business senior leadership E. Business management 32.5% 26.0% 20.1% 13.0% 8.3% Question answered 169 Question skipped 1 5 SWC TECHNOLOGY TRENDS SURVEY
7 3. What industry does your company fall under? A. Accounting and finance B. Advertising and Public relations C. Construction D. Education E. Healthcare F. Human resources G. Information technology H. Legal I. Manufacturing J. Marketing K. Non-Profit L. Professional services M. Real estate N. Retail O. Travel P. Other 6.7% 1.2% 4.9% 11.0% 6.7% 0.0% 1.8% 4.3% 20.7% 3.0% 13.4% 2.4% 3.0% 4.3% 3.0% 13.4% Question answered 164 Question skipped 6 4. Information Technology is perceived differently within different organizations. In yours, how would company leadership value IT? A. Strategic 39.9% (not an expense but an investment) B. Necessary 58.9% (sometimes an investment but often an expense) C. Not critical 1.2% (generally unnecessary and never an area of investment) Question answered 168 Question skipped SWC Technology Partners. All rights reserved. 6
8 5. Over the last twelve months, my company has A. Seen an increase in revenue B. Seen a decrease in revenue C. Seen no change in revenue 27.1% 58.1% 14.8% Question answered 155 Question skipped As compared to my company s competition my company has recently A. Gained market share B. Lost market share C. Seen no change in market share 37.0% 10.4% 52.6% Question answered 154 Question skipped 16 7 SWC TECHNOLOGY TRENDS SURVEY
9 7. During the recession my company s business model has A. Seen a decrease in profit margins B. Maintained profit margins C. Seen an increase in profit margins 46.7% 46.7% 6.6% Question answered 152 Question skipped During a challenging economy it becomes more important to prioritize projects. Given your existing technical and business environment, how would you prioritize the following projects? HIGH MEDIUM LOW A. Business Intelligence B. Virtualization C. Storage D. CRM E. ERP F. Unified messaging G. Collaboration/document sharing H. Enterprise application integration I. Security J. Infrastructure LAN/WAN K. Systems management L. Desktop operating system/office M. Proprietary systems N. Web development Question answered 164 Question skipped SWC Technology Partners. All rights reserved. 8
10 9. For many organizations the reduction of IT staff has become an unfortunate reality. By function, how has your IT staffing changed over the last twelve months? A. Network management B. management C. Security D. End-user support E. Business application (ERP, CRM) support F. Application development INCREASED DECREASED STAYED THE SAME OUTSOURCED N/A Question answered Question skipped During the new economy has your CEO/CFO asked you to: A. Invest in technologies to drive efficiencies within the company B. Simply freeze the budget and hold the line until further notice C. Cut costs wherever possible and do with less D. None of the above 23.7% 23.7% 39.3% 13.3% Question answered 135 Question skipped 35 9 SWC TECHNOLOGY TRENDS SURVEY
11 11. In considering the word value, which technology provider gives today s mid-market business the best bang for the buck? A. IBM B. Microsoft C. Oracle D. Open platform E. None of the above F. Other 4.6% 44.6% 0.0% 13.1% 30.8% 6.9% Question answered 130 Question skipped Certain technologies do a better job at cost justification. Rank the following in terms of ROI. HIGH MEDIUM LOW A. Business Intelligence B. Virtualization C. Storage D. CRM E. ERP F. Unified messaging G. Collaboration/document sharing H. Enterprise application integration I. Security J. Infrastructure LAN/WAN K. Systems management L. Desktop operating system/office M. Proprietary systems N. Web development Question answered 129 Question skipped SWC Technology Partners. All rights reserved. 10
12 13. Telecommuting has become increasingly easier as technologies such as unified messaging have evolved. How is telecommuting positioned with your business? A. It is the norm (more folks telecommute than not) B. It is the exception (a minority of folks telecommute) C. It is forbidden D. Does not apply 14.8% 65.9% 5.9% 13.3% Question answered 135 Question skipped Sometimes, a business can become dependent on a particular IT staff member. Typically this is because that staff member has unique and guarded knowledge about a system or technology. The question of what to do if that person wins the lottery can become un-nerving. Would you say this scenario: A. Absolutely fits our situation B. Used to fit our situation C. Never fit our situation D. Does not apply 40.3% 27.6% 8.2% 23.9% Question answered Question skipped SWC TECHNOLOGY TRENDS SURVEY
13 15. My company s business outlook over the next twelve months is: A. Optimistic B. Cautiously Optimistic C. Neutral D. Pessimistic E. Highly pessimistic 20.1% 50.7% 17.9% 8.2% 3.0% Question answered Question skipped SWC Technology Partners. All rights reserved. 12
14 SWC Technology Partners is a leading provider of innovative IT solutions to small and medium-size businesses. For 30 years, SWC has excelled at providing strategic guidance and delivering solutions tailored to the needs of growing organizations. SWC s areas of expertise include best-in-class Managed Services, Performance Management, Business Applications, Messaging & Collaboration and Network Infrastructure & Security solutions. Headquartered in Oak Brook, Illinois, SWC is a Microsoft Gold Certified Partner, a Symantec Gold Certified Partner and a Hewlett-Packard Enterprise Partner.
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