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Mid-Market Spending Is Hot

Midmarket spending is hot, according to our exclusive VARBusiness 500 survey, a proprietary quarterly survey of the 500 top solution providers in North America.

Our survey defines midmarket businesses as those employing between 100 and 999. For the second quarter, from April 30 to June 30, nearly nine out of 10 (89 percent) respondents told our researchers that spending at their midmarket companies was higher than last year. What's more, fully 93 percent say they anticipate midmarket spending will improve this year, compared with 2003.

Solution providers said that average sales cycles in the midmarket remained relatively stable, with 54 percent of the 74 solution providers surveyed reporting no change in length of time it took to close a sale. On either end of the spectrum, however, one out of four (25 percent) said their sales cycles have increased, while 20 percent said midmarket customers are buying and closing more quickly. The hottest deal: A very strong 64 percent of these VARBusiness 500 solution providers experienced an uptick in security-solution spending among midmarket customers.

Among other pressing VAR500 issues, while more than one-third of those surveyed (34 percent) said their 2Q '04 gross profit margins were ahead of expectations, though that percentage is down slightly from the end-of-the-year's expectations. A year ago, 41 percent reported gross profits to be ahead of expectations in 4Q '03.

Additionally, nearly four in 10 respondents (39 percent) said company revenues were ahead of expectations for the second quarter. That's up from last year when less than one-third (31 percent) reported a similar "ahead of expectations trend" for their revenue for 2Q '03.

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