Medium-sized firms are spending more than their enterprise counterparts on IT, according to IDC.

The analyst firm questioned almost 200 firms with between 500-1,000 employees, the results of which showed almost half had increased their IT budgets for 2008.

Services are a key investment area for these firms, according to IDC. But security tops the investment agenda, followed by infrastructure and application modernisation, with new software offerings the lowest priority.

In the same way as the larger organisations, mid-sized firms are keen to align their IT infrastructure better with the business, but have less experience to do so. As a result they plan to buy more consultancy services to help fulfil their goals.

Two-thirds of mid-sized firms already use outsourcing to some extent, and a third are ready to invest in more, or invest for the first time. But cost reduction is a more important factor for these firms than it is for larger enterprises.

Mette Ahorlu, consulting director at IDC's European software and services group, said: "It is interesting to note that medium-sized enterprises are investing strongly, following similar strategies to those of the largest enterprises. However, their thinking around IT is closer to that of a few years ago in large enterprises. Their lower level of internal technical knowledge and experience leads them to rely more strongly on advice from vendors, which should adapt their messages to this fact when addressing the segment.

"This means that medium-sized customers must have major confidence in their service provider, and that the existing relationship plays a much stronger role in this segment than among larger enterprises. They need to buy more standardised services, which are cheaper and easier to consume, and vendors need to present them with clearer and fewer choices in order to make the buying process less painful," Ahorlu said.

Ahorlu added that vendors should not approach medium-sized businesses with a generic 'SME strategy,' because they expect a more focused, industry-specific approach from their vendors.