Midmarket companies typically have extraordinary IT needs, but not extraordinary budgets to meet those needs. So it comes as no surprise in these financially strapped times that midtier companies prioritize security and staffing as their top concerns.

The annual survey released by SWC Technology Partners late last month reveals technologies, strategies, and tactics generating the greatest impact, and indicates which less vital projects are being tabled until at least 2010. Researchers queried 170 IT and business-line managers from organizations in Illinois, Wisconsin, and Indiana in manufacturing, retail, education, construction, healthcare, accounting, and non-profits. More than half the respondents manage between 100 and 2,000 users.

They rated security as the highest priority technology project category, with 55 percent indicating it holds top importance. The result was curious to SWC analysts considering security projects typically have little or no impact on revenue generation or creating operational efficiencies.

"This may reflect the fact that IT managers are focusing their limited resources on crucial areas that cannot be compromised, or it may be that that this category has been neglected during the recession and managers fear the consequences of such neglect," the report reads.

Respondents ranked business intelligence as the second highest priority, with 38 percent saying BI was highly important to their success. Storage, Web development, and LAN/WAN infrastructure rounded out the top five technologies.

Midmarket companies taking the SWC survey also cited virtualization as the technology offering the greatest bang for its buck (109 votes), followed by collaboration/document sharing (97) and Web development (90).

When it comes to IT staffing, SWC's researchers found respondents looking to bolster application development in both staffing levels (13 percent increase over last year) as well as outsourcing (6 percent increase over last year). The numbers point to a migration away from, or some augmentation of, legacy software systems to complex, customized ERP systems.

"These figures may reflect a trend to outsource these functions to a third party through managed services," the report says, noting that at the same time, all categories surveyed saw a net decrease in internal staff.

End user support is where IT staff reductions are occurring most frequently (13 percent of respondents), followed by network management and email management. But midmarket companies can't cut too close to the bone, SWC found:

"Forty percent of respondents indicate that their organization is absolutely dependent on a single individual for his or her systems knowledge and expertise. Only 8 percent of respondents say they never had an absolute dependency on a single individual for his or her systems knowledge."

When asked to look forward to 2010, 51 percent of respondents categorized their business outlook for the next year as "cautiously optimistic." However, SWC found slightly more than 8 percent of midmarket companies identifying themselves as "pessimistic," and 3 percent as "highly pessimistic." So we're clearly not out of the woods just yet in the midtier.

It will be interesting to see how technology priorities have shifted as the calendar year concludes, whether staffing reductions flatten and whether top-line technology priorities change. SWC said it will conduct follow-up surveys on those issues as well as gauging how midmarket companies maintained or increased market share despite cuts in IT budgets and staff.

— Michael Singer, Senior Editor, Internet Evolution. His focus includes executive issues... What's top of mind for CEOs, CIOs, and CTOs?