State Of The Midmarket In 2024: IT Leaders’ Views On Security, AI Hype And More

Insight from research firm Gartner reveals the biggest trends and most pressing issues for midmarket IT leaders.

Data governance. Modernization. Security. AI.

These are some of the top concerns of IT executives in 2024, according to “The State of The Midmarket Report,” prepared by research firm Gartner.

The report was presented in detail by Mike Cisek, vice president analyst, midsize enterprise research, infrastructure and operations at Gartner, at the Midsize Enterprise Summit this week.

The report, which was compiled by surveying midmarket IT leaders, focused on several key issues:

Overall, most IT leaders said they have a positive business outlook.

“We have political instability and inflation and potential recession fears, but the outlook is good,” Cisek said during his presentation.

IT Leaders’ Top Priorities In 2024

Security, modernization and data remain top priorities among IT leaders at midsize organizations.

Twenty-five percent of IT leaders cited cybersecurity and data privacy as their most important priorities.

Next were AI, machine learning and automation.

Coming in third place were IT cost reduction and optimization.

According to Cisek, 72 percent of midmarket IT leaders are looking to “flush out risk and look to [other] leaders in their space when it comes to their approach in adopting new technology.”

Thoughts On Strategic And Emerging Technology

IT leaders are most concerned about protecting their investments when it comes to emerging technology, the survey revealed.

The top strategic trends those leaders said they were interested in were AI trust, risk and security management.

Security Practices

Unfortunately, the survey also revealed that most IT leaders said that they only “periodically” assess their cybersecurity practices. Less than one-quarter of respondents said they have a “mature” cybersecurity program.

Over 70 percent of midmarket IT leaders said they are outsourcing some security components, including MDR/XDR/NDR and SOC services.

Seventy-four percent said they have a formal incident response plan in place, and 51.7 percent said they test the plan annually.

When it comes to security, Cisek advised that midmarket IT leaders not tackle it on their own and make use of outsourcing. In addition, he said to “make sure you are constantly adjusting your security posture.”

VMware Woes

Cisek said that the acquisition of VMWare by Broadcom is “the topic of the year” and a move that affected many midmarket organizations.

“You’re going to hear me say ‘VMWare’ about a thousand times during this presentation. Not because that’s what we should be paying attention to, but because it’s just one of the biggest disrupters we’ve experienced in the last 20 years,” Cisek said.

The survey results revealed that 80.4 percent of midmarket IT leaders are “actively or passively pursuing alternatives” to VMWare, Cisek said.

Earlier this year, before the acquisition was announced, 57 percent of leaders were looking to move away from VMware, Cisek noted.

Feedback From Executive Leadership

Sixty-five percent of respondents (CIOs) said that their executive leaders and board of directors had given them positive feedback, indicating that their IT leadership was aligned with the organization’s business objectives.

Cisek said that the relationship between a midsize CIO and executives is often an intimate one, with a flat organizational structure, leading to good communication between the CIO and executive management.

However, he also cautioned IT leaders to not be too technical when discussing IT goals and budgets with leadership. Instead, stick with data, including reports and solid analytics.

Weighing In On AI

Gartner’s “State of the Midmarket” survey provided keen insight into IT leaders’ thoughts and practices surrounding AI.

The No. 1 benefit of AI was cost savings and time efficiency, according to those surveyed. Next was automation of repetitive tasks.

The key part of looking at GenAI is looking into “low-risk, high-benefit use cases,” Cisek said. “Look for opportunities for AI-human co-existence and things like coding or testing, document production [and] figure out what you are going to do from a policy perspective,” he added.

The “State of the Midmarket” report showed that while most organizations are running a hybrid workload of cloud and on-premises, 70 percent of workloads globally is on- premises. Eighty percent of that workload is from critical systems, many of them legacy– five, 10 or 15 years old.

Midmarket IT's Biggest Challenges

A majority of IT leaders cited security, risk and compliance as posing their biggest challenges. Next were change, innovation and modernization around apps, infrastructure and platforms.

Many IT leaders reported “technology hype,” especially around AI, as a challenge.

IT leaders have some wariness about generative AI, noting risks including behavioral, security and around data. They also were concerned about GenAI regulation, its misuse and “unseen complexities,” Cisek said during his presentation.

Another big challenge is cloud computing costs. Gartner’s study showed this has been a top concern consistently for the last three years and urged IT leaders to “prioritize cost- aware design, focus on workload placement, hybrid architecture” and create a way to measure and track cloud computing spend.

Advice For Midmarket IT Leaders

Based on the survey results, Cisek and Gartner recommended several key actions for midmarket IT leaders to take: