Hot Topics For The Mid-Market In 2023

Our CTO Howard Holton offers five pillars of tech success for mid-market organizations as they transition from 2022 to 2023. 

My recommendations for the mid-market coming up to the end of the year, going into 2023, and doing your annual planning?

Cloud strategies are one “big picture” topic that the mid-market really needs to focus on

How should mid-market organizations think about their move to Cloud? And where are they going to see the biggest bang for their buck? A lot of what we talk about in the cloud is really built around hybrid and multi-cloud, and neither is necessarily where the mid-market is employed to really take advantage. Multi-cloud is expensive. Organizations must have people that understand the intricacies of the individual clouds and then build to an abstraction layer to be able to really take advantage of those clouds. 

So, really, they need to pick one cloud vendor, and really focus on increasing their maturity and improving their capabilities with that cloud vendor, and on the resiliency that makes the most sense for how their business runs, and what their reasonable tolerance for outages is. 

The next topic is what I like to call infrastructure, or tools, “sweating” 

This really has to do with some cost management – how much I can sweat an asset is how much I can continue for it to run after its ideal lifespan. The ideal lifespan for most infrastructure purchases is three years. If I go beyond three years, I’m now sweating the asset. What I want to think about is, where is a good place to sweat an asset? and where’s a bad place to spend an asset? I want to think about the categories of things that I would say are sweatable, from those I cannot sweat to things I can really extend beyond the 3 years.

This is across servers, storage, and networking. For each, make sure that you can still get the software updates. You can’t get current patches, if you can’t get current drivers, at the very least, you’re going to miss out on security updates. You’re also going to miss out on any stability and bug fixes. So really read the fine print. Make sure that you stand up for that.

Then I would focus on security, which I would break into two pieces

The first is – the mid-market is going to continue to be a primary attack sector for ransomware, mostly because they simply have less money to throw at security. The more you spend, the harder you’re going to be able to penetrate, even if the target is ultimately larger. These days, ransomware gangs are, in fact, running their operations like a business. 

So, what you really need to think about is, am I investing properly in security? What I would look at is, am I investing, let’s say, the half a percent of my global turnover in security that I should be? And have I done it for the last five years? If the answer to either question is no, you really need to improve your security spending. Unfortunately, it’s not like you could just raise it half a percent, and that would be ok. it’s not really going to get you the result because you’re going to have to play catch up quite a bit.

The second security piece is that API Security is going to become an increasing problem. I’d start looking at getting your arms wrapped around, what APIs do you take advantage of currently? How do you access those APIs? What is their intended use? And really start documenting. We estimate that organizations underestimate the number of APIs they have in the organization from 50% to 400%. So, it’s a very, very, very large problem that we see happening. 

Next, I would start doing some significant contract reviews 

It may be worth engaging a company to really understand what your total spend is, to make sure that you understand spending per vendor, and to look for potential to consolidate across the organization. From there, you can start master services agreement (MSA) negotiations and contract negotiations to really drive the price down – particularly with end-points. Many organizations think their spending is anywhere from 40 to 60% of what their actual spend, for things distributed out into the organization. The ability to consolidate that can be a significant cost saving. 

You can also look at vendor consolidation/partner consolidation. You will likely have more vendors than you need. Now is a good time to think about those that are really providing distinguished value back to your organization. They are really helping you think about your business and the business of providing technology as a business and start consolidating to those. That way, first. you can lower the chatter that occurs, but second, you can also again leverage of the power of your wallet, and get a little more value from those relationships. 

Finally, as you go toward the end of the year, I would be thinking about your people

We estimate that people costs are increasing by about 15% in the next year. And so, anyone that you haven’t given a 15% raise to in 2022 and 2023, or is in a recent acquisition where they were paying those proper wages, is likely going to be looking for somewhere else to go, and as we all know, you tend to lose your most valuable people first. So, I’d really be paying attention to that, and looking after them. 

Most major financial organizations have entered a lockdown period where they allow no changes between now and the 1st of next year. A lot of that has to do with the buying that occurs during the holiday season and making sure that there’s zero interruption to that. Well, it’s not going to hurt you to do the same thing and really enter into a period of change/freeze, as well as reflection and relaxation. 

There’s this addiction to this final push to complete things before the end of the year, but honestly, it tends to be arbitrary. You may have to push to complete those projects, but the reality is, now is the time to stop as much change as possible, and free up as many resources to let them start taking vacation in larger numbers. There’s nothing like being able to be the employer that says, “Hey, go spend time with your family, relax”. To also have the family really change their focus and be able to say, “You haven’t been home much in the last few months, but it’s nice to see you, and maybe this employer is good!”