(Mark Schlack, Vice President, Editorial) Recent years have seen large infrastructure investments in IT -- storage area networks, network-attached storage, server farms, etc. -- but the economic downturn has forced some to cut back. While a little more than a third of midmarket companies will spend more on servers, storage and networks, about a quarter will spend less. Those that are spending are mainly spending to support application enhancements and upgrades.

Midmarket CIOs are sticking with what they know -- rack servers and storage are on the shopping list at 55% and 53% of companies, respectively. In the enterprise, blades are the new rack, as far as being the de facto commodity form factor. But like their enterprise counterparts, midmarket IT shops will be investing in server virtualization software in big numbers (51%).

Midmarket companies have been slower to adopt virtualization, with 31% reporting no current deployment. But looking out 12 months, 39% expect limited deployment, 25% anticipate significant production numbers, and 36% expect most production servers to be virtualized. Enthusiasm for server virtualization hasn't spread to the desktop variety: 46% report no plans for 2009.