Why Small and Midmarket Companies are Falling Behind on IT Initiatives And How to Catch Up

IT initiatives like cybersecurity, cloud migration and digital transformation are no longer optional — they're essential for business growth. Yet, small and midmarket companies often struggle to keep pace. Unlike larger enterprises with deep resources and dedicated IT teams, smaller organizations face financial, staffing and skill-related constraints that slow progress.

‍

As a result, many smaller companies are falling behind in IT modernization, leaving them vulnerable to security risks, operational inefficiencies and competitive disadvantages. However, they can bridge the gap with strategy and innovation partners. We’ll explore why small and mid-market companies struggle with IT initiatives, how larger enterprises maintain an edge and what these companies can do to bridge the gap.

The Resource Challenge: Why SMBs and midmarket companies struggle

‍

1. Limited resources and overstretched teams

‍

One of the biggest hurdles non-enterprise companies face is budget constraints. Unlike large enterprises that allocate millions to IT, smaller companies must carefully prioritize spending. Limited budgets often lead to underinvestment in critical areas like cybersecurity, cloud adoption and emerging technologies.

‍

Additionally, smaller companies don't have specialized IT teams. Instead, they rely on a few generalists responsible for everything from daily troubleshooting to long-term strategy. With limited bandwidth, these teams are often stuck in a reactive mode, putting out fires rather than driving innovation.

‍

A 2024 Cyber Readiness Institute report found that over 50% of SMBs prioritize cybersecurity, yet they are the least likely to have in-house resources to address it effectively.

‍

2. The skills gap in a rapidly changing IT landscape

‍

Technology is evolving faster than ever and many SMBs lack the expertise to keep up. Advanced cybersecurity protocols, cloud architectures and automation tools require specialized knowledge that smaller teams may not possess.

‍

A 2024 Cyber Readiness Institute report found that over 50% of SMBs prioritize cybersecurity, yet they are the least likely to have in-house resources to address it effectively. Without the right skills, IT projects stall, security risks increase and businesses struggle to leverage technology for growth.

‍

Beyond technical skills, cultural inertia can also be a roadblock. Mid-sized companies often resist change, leading to outdated IT strategies. Meanwhile, new market entrants — unburdened by legacy systems and internal resistance — adopt modern technologies faster, gaining a competitive edge.

What larger enterprises are doing differently

‍

While smaller companies wrestle with IT challenges, larger enterprises are surging ahead. They have the scale to hire specialized talent, invest in cutting-edge tools and deploy major IT initiatives more efficiently. Even when large companies face internal bureaucracy, their ability to dedicate resources to IT gives them a clear advantage.

‍

One key lesson SMBs and midmarket companies can learn from large enterprises is the value of outsourcing IT operations. Many large companies have shifted non-strategic IT functions to managed service providers (MSPs), allowing internal teams to focus on business innovation rather than routine maintenance.

‍

However, smaller companies often view IT as a cost center, limiting their ability to drive business value from technology. This mindset needs to shift — modern IT should be a strategic asset that enhances competitiveness and operational efficiency.

‍

How non-enterprise companies can catch up: Bundled managed services and AI-enabled platforms

‍

For smaller companies, bundled managed services and AI-enabled platforms are becoming game-changers. Bundled services streamline IT management by integrating critical functions, such as infrastructure, security, cloud solutions and digital employee experience (DEX), into a cohesive and cost-effective package. These bundled services enable SMBs and midmarket companies to leverage enterprise-grade tools and expertise without overburdening their limited resources.

‍

AI-enabled platforms add another support layer by offering real-time monitoring, predictive analytics, automated root cause analysis and AI-driven response automation. These tools can identify potential issues before they escalate, ensuring seamless operations and reducing downtime. IT teams can focus on strategic projects that drive growth by automating repetitive tasks like updates and backups and using AI-enabled self-service, knowledge management and intelligent portals.

The need for a strategic IT partner

‍

Choosing a technology partner with comprehensive solutions and services helps non-enterprise companies modernize their IT infrastructure, maintain security and scale operations efficiently. With access to these advanced capabilities, smaller companies can close the technology gap and position themselves for long-term success. While many smaller companies rely on MSPs for reactive ITsupport, fixing issues as they arise, they should consider a provider thatoffers proactive solutions to gain a competitive edge. Some MSPs offer proactive,scalable, and cost-effective solutions that align IT with business growth.

‍

“Partnering with Silver Tree transformed our infrastructure management. Their proactive monitoring and seamless support helped us reduce operational costs and enhance reliability.”

CTO Mid-Market Financial Services Firm

‍

What to look for in a provider

‍

A strong MSP should:

‍

• Streamline IT operations by integrating cybersecurity, digital employee experience, cloud management, SaaS environments, end-user experience and compliance into a unified service model.
• Leverage AI-driven platforms to automate routine tasks, detect potential issues before they escalate, and enhance user experience, satisfaction, productivity and overall system reliability.
• Support business innovation by enabling trusted data-driven decision-making, improving application performance and modernizing legacy systems.
• Provide transparent, scalable and elastic pricing, enabling IT to flex with the business and seamlessly add or subtract services.

‍

The best MSPs don't just manage IT — they optimize it, helping businesses become more efficient, competitive, and resilient. Leading providers invest in cutting-edge technologies from industry leaders like ServiceNow, ScienceLogic, and Microsoft, combining these tools with expert-driven operational models to maximize performance and security. By partnering with a provider that prioritizes strategic enablement, smaller companies can transform IT from a cost center into a business advantage — enhancing productivity, customer experience and long-term growth.

‍

The Time to Act Is Now

Falling behind on IT isn't just an inconvenience, it's acompetitive risk. As larger enterprises continue investing in IT-driven efficiency and security, new market entrants unincumbered by legacy technology (technical debt) and cultural debt (lack of desire to change) can disrupt smaller companies' future, potentially putting the future of their business at risk. Smaller companies must find ways to close the gap.

With a new year upon us, now is the time to consider alternative approaches and vendors who can turn your technology into one of your greatest assets in the new year. By partnering with the right IT service provider, your IT team can gain the security, support, and scalability it needsto accelerate key initiatives, optimize operations, and thrive in an increasingly digital and competitive market.

‍

Is your company struggling to keep up with critical IT initiatives? Don’t let limited resources or outdated systems hold you back. Request an IT Operations Assessment. Our experts will evaluate your current infrastructure, identify key gaps, and provide a clear roadmap to help you optimize your IT for greater security, efficiency, and growth.