Eight in 10 Mid-Market Companies Expect Revenue Growth in 2011

An overwhelming majority -- 93 percent -- of mid-market companies expect the United States economy to grow, according to top-line results of a new survey from Deloitte titled, “Mid-Market Perspectives: 2011 Report on America’s Economic Engine.” Ongoing concern about government debt and overall strength of the economy, however, tempers respondents’ optimism.

Conducted by the Economist Intelligence Unit, the survey gauges the economic outlook of mid-market chief executive officers and executives from across the U.S. and revealed key insights into this business segment’s plans for growth and recovery after enduring the worst economic downturn in 80 years.

As many as eight in 10 (81 percent) executives from U.S. middle market (companies with $50 million to $1 billion in annual revenue) expect annual revenue to increase in 2011. Moreover, survey results show mid-market firms are well-positioned for growth after focusing on improving productivity, deleveraging and rightsizing their operations during the downturn. Two-thirds of companies surveyed report lower debt ratios today than prior to the recession and 54 percent have higher cash balances. Strengthening the balance sheet will continue as a top priority as 63 percent of executives say cash balances will still be up in a year’s time and 65 percent agreeing debt ratios will remain down.

Overall, the survey provides a positive and encouraging outlook for growth in the middle market and the U.S. economy. Additional survey highlights include:

-- Productivity: Nearly three-quarters (72 percent) of respondents report higher levels of productivity than pre-recession.

-- Hiring: A large majority of executives (69 percent) plan on adding full-time employees this year.

-- Business expansion: As the majority of firms (56 percent) focus on domestic growth targets, 34 percent of all firms and 44 percent of companies with annual revenue in excess of $500 million will focus on global expansion.

-- Access to financing and capital: Despite the challenges to access financing and capital, 38 percent of respondents will pursue financing to expand their businesses in the coming year.

Middle market executives surveyed also recognize fundamental structural challenges which temper their optimism and influence their business decisions towards mitigating risk. In particular, at all levels –federal, state and municipal – government debt is ranked by half of all survey respondents as the primary obstacle to U.S. growth.

Other concerns expressed by middle market executives include:

-- Regulatory issues: There is broad concern that burdensome regulation, as well as healthcare costs and high tax rates, are obstacles to growth in the short- and long-term.

-- Economic growth: While an overwhelming majority of executives anticipate the economy will grow, only 20 percent believe it will expand at a pace that will support widespread job creation.

More information can be found at www.CRMindustry.com.

62% of small companies are using social networking in everyday business

A survey conducted by Really Simple Systems, Europe's largest hosted CRM (Customer Relationship Management) vendor, has revealed that great swathes of small and medium-sized enterprises are embracing social media as a means of conducting business. The annual survey has traditionally questioned small business owners, directors, sales, marketing and IT managers, on their views of cloud services and the reliability of the products currently available in the market and this year covered the issue of social media for the first time.

From a sample of 862 respondents - the majority from small and medium-sized organizations with less than 50 employees - 62% report that they now use social networking in everyday business. The research also shows that 92% of those using it do so to keep in touch with existing customers, whilst 78% are using it to find new customers.

LinkedIn is the most widely-used social media tool by small businesses, with 83% of those that said they were using social media using the business-orientated social networking site. Facebook (72% of respondents) is the next most popular means of conducting 'social business', followed closely by Twitter (65%). Forty-four percent of these socially active small businesses also run a company blog to engage with the public, but only 3.5% reported to be using MySpace, and a handful of others are using other forms of social media such as YouTube, Yammer, Xing, Quora and FourSquare.

The use of cloud CRM by small businesses has now overtaken in-house CRM, with 45% of respondents now using hosted applications as opposed to 36% using in-house CRM.

The survey confirms that CRM systems remain the most popular type of Cloud-based solution used by small businesses and 66% of respondents reported that they are now more confident in hosted CRM systems than traditional in-house systems. The use of hosted accounting, ERP, payroll and manufacturing solutions has gone up slightly (between one and three percent), whilst one percent less companies are using a hosted HR system. Despite only a modest rise in their use, confidence in hosted systems over their in-house counterparts has risen in most areas, most notably in the payroll market, with some 54% or respondents now more confident in hosted solutions - up 10% on last year.

The survey also revealed that almost half of respondents feel as confident about the reliability, speed, data safety, and functionality of cloud applications as they do with in-house offerings. This is indicative of the now almost identical usage of hosted and in-house CRM.

Perhaps surprisingly, 40% of those questioned plan to spend more on IT in the next 12 months than they did in the last 12 months and a further 38% will keep IT spend at the same level. 

More information on Social CRM can be found at www.CRMindustry.com.

New Research Finds 60% of Companies Using Applications in the Cloud

InformationWeek Analytics, a service for peer-based IT research and analysis, announced the release of its latest research report; SaaS 2011 which explores the state of software as a service, a technology being adopted at unprecedented rates.

SaaS adoption is up 13 points over last year, to 60%, despite lingering concerns about features and functionality. More than one-quarter of survey respondents say the applications they have delivered as services are mission critical, down from 34%. Meanwhile, startups and niche SaaS providers are going up against established vendors like Microsoft, Google and Salesforce.com, giving smaller businesses opportunities to take advantage of the burgeoning technology.

Findings:

-- SaaS use among companies surveyed jumped to 60% from 47% last year.

-- Speed to implement, capex savings and opex savings are the biggest drivers behind the move to a SaaS model.

-- Top reasons 40% of companies don't use SaaS: lack of business requirement, concerns over security and concerns over data ownership.

-- SaaS satisfaction levels dipped 11 points, to 74%; still, only 14% say their app services don't meet expectations.

-- Twenty-six percent of respondents rate their SaaS-delivered apps "mission-critical," down from 34% a year ago; they rate 61% "important," vs. 51% last year.

-- CRM (44%), Web presence (38%) and email (35%) are the most common SaaS apps, followed closely by HR/recruiting (33%) and sales (32%).

-- Microsoft (34%, up 8 points), Salesforce.com (30%, down 11 points) and Google (26%, down 2 points) still garner the bulk of the market, but ADP (18%, up 15 points), IBM (16%, up 14 points) and EMC (15%, up 7 points) have gained ground, and smaller companies abound. Oracle dropped 11 points, to 15%.

-- The split between companies using customized SaaS apps and those using standard SaaS apps: 50/50.

More information on CRM & Cloud Computing can be found at www.CRMindustry.com.

Cloud Computing Professionals Are In Demand

According to Janco, while much of the U.S. economy experiences a “jobless recovery,” the cloud computing sector shows a strong upward trend according to the Internet job hiring sites. Demand for technologists with cloud skills is surging, as shown listings of cloud computing positions at the job search engine Indeed. That trend is borne out in the current job listings from two of the largest cloud providers:

-- Amazon.com currently has job listings for more than 900 technical jobs, including at least 423 positions at Amazon Web Services, the company’s cloud computing operation

-- Rackspace Hosting is looking to fill 100 available positions in various IT areas at an upcoming job fair, Rackerpalooza 2011. Most of the growth at Rackspace over the past year has occurred in the company’s cloud computing business

-- Dice.com has 1,776 jobs posted with cloud in the job title

-- Monster.com has over 1,000 jobs posted with cloud as one the job requirements

Poaching Likely to Increase

A recent survey from accounting firm BDO found that cloud adoption was a factor in technology companies’ plans to boost hiring in 2011. Forty six percent of CFOs at tech companies said they expect to boost employee headcount this year, while just 7 percent expected staff to decrease.

The demand for cloud technologists may also lead to more poaching of experienced workers from competitors. A recent survey by Dice.com found that 62 percent of hiring managers and recruiters anticipate that tech talent poaching will get more aggressive this year, while just 1 percent of respondents saw it receding. “There are few consequences for technology professionals should they decide to jump to a competitor,” Dice reports. “Only 11 percent of hiring managers said they would not allow a former employee to return after being poached.”

Janco feels that the recovery has not taken hold and the IT job market will be soft for at least one more quarter. Janco predicts there will be more churn in IT staff as CIOs accelerate their move to more flexible staffing models. CIOs are outsourcing more technical work, including managed IP services such as VoIP and VPNs. They are hiring more contractors for desktop and security services, and they are putting more applications such as remote backup in the cloud. At the same time, they are looking to hire IT people with business and analytical skills, such as risk management and project management. CIOs report that they're having trouble hiring IT people because either they can't find IT professionals with the right business skills or they can't afford them. All of this means more turnover in IT departments.

More information on Cloud Computing can be found at www.CRMindustry.com.