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Cloud delivers growth and speed to market for midsize business

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By Doug Clark & Robert Tickell

Is cloud and the innovation to market that cloud helps enable a “killer app” for the UK’s midsize businesses?

Midsize business is the often unsung hero of the UK economy. In fact, Deloitte estimates that some 300,000 companies in the UK fall into this category—each driving turnover between £15 million and £700 million. They usually employ between 50 and 499 employees—but what does this mean?

Well, when you aggregate, it totals some 16 percent of UK workers and they generate and account for 22 percent of UK revenue. Interested yet? Surely, compared to bigger enterprises whose logos bedeck the business pages, our glorious mid-market sector in the UK punches well above its weight.

We predict this impact will get even more impressive as we continue to unfold from the recession. Speaking of which, the natural activities of these companies accounted for over one third of all private sector jobs created between 2010 and 2013. Even when times are tough, mid-sized businesses help the UK in its current recovery cycle. Our experience shows this sector to be a key business bellwether.

In Germany, this sector is the most loved of any, recognized as stoking supply chains and driving the ecosystem across the economy—here in the UK, one could argue, the reverse holds true. Why? Mid-size businesses are too large to take advantage of government schemes designed to help small business, but yet lack the firepower to compete with big business.

The CBI would love more firms to become “gazelles” with a high rate of growth, to help the economy grow further. Eighty-five percent of Mid-size firms aim to maintain or increase investment over the next year, according to GE Capital.

This is where IBM can help. One of our newest treasures is our SoftLayer cloud data center in London (launched this summer). Mid-size businesses can tap into this infrastructure as a quick and agile alternative to having to invest hard earned CapEx in IT infrastructure.

Instead of buying physical IT, why not swap to cloud? This way you consume IT and pay only for what you use when you use it. It’s like buying a journey instead of buying a car. Moreover, because you don’t have to waste lead time ordering and installing the servers, you configure your system online and have an equivalent IT capacity working in minutes rather than months. IBM experience and market analysts agree that this effectively gives your management a three-month accelerator to help access a new market or launch a new product–essentially as soon as your business spots an opportunity you can “carpe diem.”

Speed and saving hardware costs are not the only benefits. Agility from cloud could be the killer business app. That cloud is inexpensive and quick to deploy means you can try more options, market test more prototypes and/or test campaigns in market to help you better tune your business strategies and thus fit your market even more accurately. This allows you to gain stronger market share and grow a loyal customer base. It could be a competitive advantage as we map to the emerging markets ahead of us.

Our research shows that these pacesetting businesses grow revenue twice as fast as the pack and this isn’t at the cost of profit. Pacesetters gain 2.5 times the profit growth of the pack–very “gazelle” indeed.

This summer IBM launched its cloud marketplace, a one-stop shop to help businesses of all sizes buy just the right amount of software or services to get the job done. If business growth comes quicker than planned, you can access and add more enterprise-class software in just a few clicks. IBM is moving most of our own and our clients’ businesses to cloud.

In addition to building more SoftLayer cloud capacity in London and around the world in 2014, IBM has been converting most of our software to software-as-a-service (SaaS) formats. This way you only buy what you want just when you need it.

In the API economy, we’ve built a developer environment called Bluemix, and launched that this summer as well. What’s Bluemix? Bluemix is the fastest way for your developers to start writing code—almost everything else is done for them—and they can write in a whole range of programming languages and bolt on additional services that other parties as well as IBM and the Cloud Foundry Foundation community may have added, such as analytics or mobility services.

So, if you develop your own software, why not build your next solution on Bluemix?
Bluemix starts free, but as you grow you can try pay-as-you-go or subscription choices, too—whatever fits best.

All of our cloud business is aimed to meet the current and most importantly the future needs of your business. How? We use open standards to give you confidence that you haven’t just been caught in a supplier lock-in.

The new businesses we’ll witness winning in the market will be composable businesses that use SaaS, served a-la carte from the IBM Cloud marketplace.

To refer back to the Deloitte research, there are 3 rules for growth for mid-size businesses:

• Capitalize on their own intellectual property
• Recruit and retain the right staff to enable growth
• Be adept at exploiting export opportunities

IBM and its Business Partners have dedicated teams working each day with mid-size businesses. And as shown by the recent Apple and IBM partnership, we are forging the way for re-engineering how business works.

To learn more about this, check out the recap of our recent chat, “What can Cloud deliver for small and mid-sized businesses.”

Doug Clark is the IBM UK & Ireland Cloud Leader. Find him on Twitter @cloudstuff.

Robert Tickell is the IBM UK & Ireland Mid-Market Sales Leader. Find him on Twitter @rmtickell.

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